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New rule requires airlines to include all taxes and fees in advertised fares

Written by editor

Airline passengers won’t have to wade several steps into the booking process to see the full price of an airline ticket after a new rule goes into effect next month.

Airline passengers won’t have to wade several steps into the booking process to see the full price of an airline ticket after a new rule goes into effect next month.

The Department of Transportation rule requires airlines to include all mandatory taxes and fees in advertised fares. Despite opposition from some carriers, the new policy will be implemented on January 26.

Airlines have previously been allowed to separate government taxes and fees, which can add up to 20% to the price of air travel, from the initial advertised price of a ticket.

Southwest Airlines, Allegiant Air and Spirit Airlines have filed legal appeals to have the rule overturned in the U.S. Court of Appeals in the D.C. circuit, saying the rule violates commercial free speech rights.

In outlining the final rule in the Federal Register, the Department of Transportation said many consumers see delaying the disclosure of mandatory per-passenger taxes and fees as a “bait and switch” tactic.

“In order to understand the true cost of travel, consumers need to be able to see the entire price they need to pay to get to their destination the first time the airfare is presented to them,” the DOT wrote in the final rule.

Southwest and other opponents say the rule singles out airlines.

“Our main objection … is that there is no justification for treating air travel differently from just about everything else that consumers purchase, i.e. they pay for the price of goods and services and then pay tax. And that’s how everything is advertised, as the price of the item separately from the tax on that price,” Southwest spokeswoman Brandy King said via e-mail.

“Forcing airlines to include taxes will also make air travel ‘look’ more expensive when in reality it’s not,” King wrote.

Baggage fees and other ancillary charges are not included in the ruling because those charges are optional.

The new policy is part of a package of air travel passenger protections that start in January. The price advertising rule will go into effect two days after the other rules, following American Airlines’ request to implement it on a day that’s less busy in terms of ticket sales and online traffic.

Among the other protections:

• A ban on price increases after a ticket has been purchased

• A 24-hour window for passengers to hold or cancel a reservation without payment or penalty for reservations made a week or more before the departure date

• Required disclosure of baggage fees upon booking and on e-ticket confirmations

• Required prompt notification of delays of more than 30 minutes, cancellations and diversions

• The same baggage allowance and fees to apply throughout a passenger’s trip