Airlines Lose Bid to Block Ban on 'Deceptive' Airfare Advertising

Airline costs
By JOAN LOWY

WASHINGTON -- The government can require airlines to show consumers a total ticket price that includes taxes and fees in print and online ads, the U.S. Court of Appeals said Tuesday, rejecting an industry challenge to a series of consumer protection regulations.

The Department of Transportation, which issued the regulations last year, has the authority to regulate "unfair and deceptive" airline industry practices, the three-member panel said in its ruling.

The ruling also covers two other regulations: A requirement that airlines allow consumers who purchase tickets more than a week in advance the option of canceling their reservations without penalty within 24 hours after purchase, and a ban on airlines increasing the price of tickets or baggage fees after tickets have been bought.

The rules had been challenged by Spirit and Southwest airlines, with the support of two major airline industry trade associations.

Prior to the new regulations, airlines could advertise a base airfare and separately disclose taxes and fees, which consumers would have to add together to arrive at a total price. Under the new regulations, airlines can still breakdown the price of a ticket to show taxes and fees, but the total price must be displayed in the largest type size and be the most prominent price in the ad or on the web page.

The airlines argued that there was nothing deceptive about listing taxes separately, which they said is the general norm in the U.S. economy.

But Judge David Tatel, who was appointed by President Bill Clinton, wrote in the decision that there's nothing in the regulations that would force airlines to hide the taxes. As an example, he pointed to Spirit's website, which listed taxes under the heading: "The government's cut."

Judge Raymond Randolph agreed the transportation department has the authority to require the ads display a total ticket price, but wrote in a dissent that he disagreed with the portion of the regulation that requires a larger typeface be used for the total price than for taxes and fees. He said the regulation restricts the airlines' political speech. Randolph and the third judge on the panel, Karen Henderson, were appointed by President George H.W. Bush.

Officials for Southwest (LUV) and Spirit (SAVE) said the two airlines are already complying with the regulations.

"While we're disappointed in the court's decision, it really doesn't further impact us," said Brad Hawkins, a Southwest spokesman.

Misty Pinion, a Spirit spokeswoman, warned: "American consumers are going to pay more for air travel and have less choice, as the [transportation department] continues to pile costly new rules onto an already over-regulated and over-taxed industry."

Kevin Mitchell, chairman of the Business Travelers Coalition, which represents corporate travel managers, said the decision is "really good news for consumers" since it reaffirms the Transportation Department's authority to regulate the airline industry.

"Were it not for the Transportation Department, [airline] consumers would have no protections whatsoever -- it would be consumer protection no man's land," Mitchell said.

Under President Barack Obama the department has issued a series of consumer regulations aimed at protecting airline passengers, including placing a three-hour limit on the length of time airlines can keep passengers waiting on airport tarmacs before giving them the option of leaving the plane. Another wave of regulations, scheduled for November, is expected to address whether airlines should be required to provide the global distribution systems used by travel agents with all their ticket price and fee information.


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76 Comments

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krzyston

In any other industry, the idea of prices cahngeing every hour would cause an outrage. Why do consumers accept it from the airlines? http://www.alexanderjkrzyston.com

July 27 2012 at 10:25 PM Report abuse rate up rate down Reply
billybuttlooker

HELL ITS JUST AS CHEEP TO DRIVE NOW

July 26 2012 at 10:32 AM Report abuse rate up rate down Reply
billybuttlooker

HELL ITS JUST AS CHEEP TO DRIVE NOW

July 26 2012 at 10:32 AM Report abuse rate up rate down Reply
rpaul20988

LOL>>>>>thought this was for airlines? But looks more like cry baby corner and little about the air travel.

July 26 2012 at 9:12 AM Report abuse rate up rate down Reply
Barbara

I can't even fly out of my hometown. I have to Drive 150 miles to an International Airport to save $200 on a 30 minute flight. The airlines could care less about fees and regulations. If you don't like it, go somewhere else.

July 26 2012 at 8:17 AM Report abuse rate up rate down Reply
magoo

I can afford to fly, but it's just too much trouble. Just start the car.

July 26 2012 at 7:41 AM Report abuse rate up rate down Reply
nikkitytom

Excellent move! And the total price should definitely be featured in bold type.

I bought a washing machine today and was astounded that a list of extras were added on. Connection hoses, some sort of connecting kit to mount stacked washer and dryer. Plus delivery, plus removal of the old machine. In all almost $150 extra charges. The consumer deserves to have the final price prominantly displayed BEFORE he takes out his credit card or cash to pay .... and THEN be surprised. Taxes should be included as well. It is very easy to configure the cash register to list the total price FIRST .... and then the separate costs.

It's deceptive and infuriatiing. And it is time for major changes .... not only by the airlines but by the entire retail business .... whether cars, clothes or food.

July 26 2012 at 5:06 AM Report abuse rate up rate down Reply
1 reply to nikkitytom's comment
disc0pat

The same is true of online purchases. They wait until the last page to add shipping and handling. They should just include those things in the purchase price. Worse are those TV adds that say they will give you an extra whatever, then add "just pay shipping and handling" (which is probably more than tthe item costs).

July 26 2012 at 7:19 AM Report abuse +1 rate up rate down Reply
nefsigh

SInce when is requiring the TOTAL PRICE to be prominently displayed " a burden"??? It is only a burden if you are trying to con someone or get over the public. Business will one day wake up and find they have no consumers left.

July 26 2012 at 12:44 AM Report abuse rate up rate down Reply
leandercannon

airlines would fight (spend your money) to not show the total????? jjust more tea party slease

July 25 2012 at 9:37 PM Report abuse rate up rate down Reply
1 reply to leandercannon's comment
Pam

I'm sure the "tea party" wants deceptive advertising...get a grip. Tired of blaming George Bush for everything?

July 25 2012 at 10:42 PM Report abuse rate up rate down Reply
1 reply to Pam's comment
disc0pat

The Tea Party wants to have no regulations on anything. They are like whiny children.

July 26 2012 at 7:23 AM Report abuse rate up rate down
scottee

hmmm...maybe politicians should stop their deceptive advertising?

July 25 2012 at 9:20 PM Report abuse +3 rate up rate down Reply