And on USAirways.com, a check for flights between Philadelphia and Phoenix reveals a disclaimer at the top of the screen: “Does not include taxes and optional fees. Checked baggage fees may apply.”
None of this may look like a big deal to you, but it is. Because there’s big money at stake. The domestic airlines raked in $3.3 billion in luggage fees last year, an increase of more than half a billion dollars over 2009.
For years, air travelers have complained that airlines weren’t adequately disclosing these so-called ancillary fees — indeed, that airlines were benefiting from a widespread assumption that checking a bag was included in the airfare, as it still is on Southwest Airlines and JetBlue Airways. But on Aug. 23, a new Transportation Department regulation went into effect, requiring airlines to disclose all fees for optional services through a prominent link on their Web sites. It’s just the first volley in what could be a protracted war between airlines and the government over fee disclosure.
George Hoffer, a University of Richmond transportation economist, believes that the new rule makes sense. “Giving more price information facilitates rational decision-making,” he says. “Without such information, markets can’t function properly.”
Even the airline industry, after initially resisting regulation, is now on board with the new online notification requirement. “The airline industry supports increased communication and full transparency, ensuring that our customers always know exactly what they are getting every step of the way,” says Steve Lott, a spokesman for the Air Transport Association, an airline industry trade group.
But what is “full” transparency? The airline industry, for its part, believes that it has done enough to disclose fees and is resisting further regulatory moves. For example, it’s opposing efforts to force it to quote a fare that includes the most common fees, particularly for things that used to be included in the price of a ticket, such as reserving a seat or checking a suitcase.
Ian Ford, chief executive of the travel site Undercover Tourist (www.undercovertourist.com), has been following the DOT rules closely and thinks they’re just a start. Not only are air travelers still unsure about the final cost of a ticket, but finding the online link to the fees is like a “Where’s Waldo” hunt on every page, he says.
The DOT says that its disclosure-rule enforcement is evolving. A spokesman told me that the agency is currently reviewing airline Web sites to ensure that they meet its requirements. Among the changes the agency has demanded: requiring the links to be moved to the first booking screen, so that no scrolling is required, and asking that words such as “fees,” “charges” and “optional services” be included in the links.