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The Transportation Department thinks airline travelers should know all the bag and seat-assignment fees they face before paying for a ticket. But after proposing in May 2014 to require airlines to provide that information, the administration continues to grapple with hundreds of comments on all sides of the issue.
The department's plan aims to alert travelers to the precise fees regardless of where they purchase their tickets. Half of all tickets are bought somewhere other than from airlines directly. Shopping at comparison web sites can be complicated, and some airlines change fees based on frequent-flier status or even the credit card used to buy a ticket.
But the proposal stopped short of requiring airlines to charge the fee at the moment the ticket is bought, something that consumer advocates had urged as a policy called "transactability." Some travelers have complained about fees that surprise them upon arrival at the airport.
As airlines divide their ticket prices into optional services such as bags, seating and food, The fees have grown into big business, with bag fees totaled $3.5 billion in 2014, according to the department's Bureau of Transportation Statistics.
If the rule is adopted, airlines would have to disclose fees for first and second checked bags, carry-on bags and for advanced seat assignments that often provide extra legroom before the traveler pays for the ticket.
“The department remains of the view that as carriers continue to unbundle services that used to be included in the price of air transportation, passengers need to be protected from 20 hidden and deceptive fees and allowed to price shop for air transportation in an effective manner,” the 118-page proposal says.
After receiving more than 750 comments, DOT has been grappling with whether to change or scrap anything in the proposal. No deadline is set for action, but the department's latest formal estimate is that the proposal will be finalized by June.
“It’s urgent,” said Charlie Leocha, chairman of consumer-advocate Travelers United. “The sooner we do it, the sooner that consumers can start to comparison shop.”
Melanie Hinton, a spokesman for the trade group Airlines for America, said it would be premature to comment on a rule before it is finalized. But she argued that airlines are already one of the most transparent industries for pricing, with the market dictating prices that are “considerably less” and “far more plentiful” than under government regulation.
“Customers today are able to choose among carriers and select the best services offerings,” Hinton said.
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Airlines argued that the department doesn't have the power to regulate fees after Congress deregulated the industry in 1978, because the services are optional. But the department contends it is authorized under a section of federal law calling on it "to prohibit unfair or deceptive practices in air transportation."
"As much or more than any other industry, airlines depend upon repeat customers to sustain the business model," Delta Air Lines said in its comments on the rule. "Delta has every incentive NOT to treat our customers unfairly or deceptively, and we strive to clearly and accurately inform our customers about Delta's fees for ancillary services, specifically including baggage and preferred seating."
The proposal is the third in a string of aviation consumer rules, with the first adopted in 2009. Earlier rules set large fines for lengthy tarmac delays and forced airlines to post the full cost of a ticket with taxes when advertising fares.
The U.S. Travel Association said nearly half (45%) of 1,031 travelers surveyed in February 2014 found it difficult to budget for travel because of fees, and that one-fourth faced a fee at the airport they didn't anticipate.
Francis Komola of Bradford, Mass., told the department that making the cost more obvious for advanced seat assignments that provide extra legroom is the most important part of the proposal.
"A significant amount of personal information has to be provided to United Airlines, for example, before the total cost of the flight is available to customers like me," Komola said.
A rule that went into effect in January 2012 required airlines to notify passengers that "baggage fees may apply" and to post fees on their websites. The specific fees for first and second checked bags must be included in the summary after a purchase and post-purchase email.
But travelers complain that some airlines don't include fees in the initial purchase, and it becomes a surprise at the airport.
"Displaying all fees as part of the ticket price levels the playing field and makes it much easier for consumers to compare apples to apples," said Matthew Kirkland of Watkinsville, Ga.
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Of course, the industry isn't monolithic. Southwest Airlines promotes its lack of baggage fees and supports greater transparency for its rivals that "may also exert downward pressure on fees."
Part of the dispute involves the technical side of how travelers shop for fares. Travel agents, whether mom-and-pop shops or online sites, urged the department to force airlines to provide detailed fees so they could relay them to customers.
"It would not be remotely practical for a ticket agent to establish direct connections with hundreds of airlines in order to obtain the data and comply with the proposed disclosure obligations," Priceline.com told the department.
But Delta warned that making ticket searches more complicated could dampen sales. Travelers "highly value speed and efficiency in the reservations process" and tend to abandon searches after 430 seconds, the carrier said.
American Airlines cited department cost estimates that the fee provision would cost airlines $46 million over a decade and yield benefits of $25 million. The cost estimate was based on additional technology -- for equipment, software and labor -- to post the fees, according to a DOT analysis. The projected benefits are based on consumers buying more optional services and airlines reducing their administrative costs for managing complaints, the DOT analysis said.
"The costs at issue are quite real" and "will inevitably be passed along to consumers in this intensely competitive industry," the carrier said.
United Airlines said requiring fees with search results involving multiple carriers would take longer and lead to "information overload."
"United has learned over many years — through extensive consumer feedback and other empirical observations — that many customers do not want this information at any point, and certainly not when they are looking at the first display that shows their search results," the carrier said.
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