The full-fare advertising rule for airlines


This full-fare advertising rule protects airline consumers


full-fare advertisingMany travelers do not know how important the full-fare advertising rule is to passengers. This rule basically mandates that all airline price advertising must include the airfare plus all mandatory taxes and fees. This means that passengers can purchase an airline ticket for the advertised price.

Of course, we say. Otherwise, it would be false advertising. However, rules and regulations do make a big difference in terms of what is acceptable as “truth in advertising” and what is considered misleading and deceptive.

Prior to the establishment of the full-fare advertising rule in 2011, airlines were allowed to advertise tickets in very creative ways. At that time Travelers United worked together with the Department of Transportation (DOT) to clarify airline price advertising.

Four years ago, newspapers and magazines often had ads stating, “Fly to London for $69!”*

The important part of this statement was always the asterisk following the price. In tiny type at the bottom of the travelers learned that this price was one-half of the round-trip ticket between a city in the USA and London not including taxes and fees.

There was one problem for consumers, however. The absolutely least expensive ticket between Boston and London cost $751 at the time. No one could purchase a transatlantic airline ticket for $69. Clearly, the claim that one could fly from the US to Europe for only $69 was misleading and deceptive. In the vernacular, it was false advertising.

What the deconstructed advertised airfare never told travelers looking to purchase tickets to London was the following:

  • No one could purchase one half of a round-trip ticket. The basis for the advertised price was never sold. Round-trip tickets were always sold as a complete flight.
  • The airfare did not include fuel surcharges.
  • The airfare did not include US airport taxes and fees.
  • The airfare did not include British airport taxes and fees.

Download Airplane Carry-on ChecklistWhile the airfare side of the cost of travel may have been listed as $138, the other mandatory taxes and fees added up to $613. The full-fare advertising rulemaking back in 2011 changed the way that airlines were allowed to advertise.

The DOT rule stated in court documents:

Under the full-fare advertising rule, airlines must disclose the full price that the consumer will actually need to pay for air travel.  Airlines may communicate additiona USCA Case #11-1219 Document #1322650 Filed: 08/04/2011 Page 1 of 2 information, such as the portion of that total price that constitutes governmen taxes and fees, in a manner that does not inhibit the customer’s ability to discern the total price. This rule was a reasonable response to concerns that recent developments in the air-travel marketplace had made it more difficult for customers to ascertain the true cost of flying.

… insist that they be permitted to continue enticing customers by advertising single-digit air fares when the actual cost of travel is vastly higher, allowing this practice to continue would ill serve the public interest. (See 76 Fed. Reg. 23110)

[The] “full-fare advertising” provision characterizes any price advertising for air transportation as an unfair or deceptive practice “unless the price stated is the entire price to be paid by the customer.” 76 Fed. Reg. at 23166 (amending 14 C.F.R. § 399.84).

Let’s look at the cost of a current airline ticket cost flying from Washington, DC, to Barcelona, Spain, in May of 2018. This Price Summary is taken from the reservation confirmation for flights dated, November 12, 2017, at 8443430 PM EST.

full fare advertising

This a bargain coach ticket, the sort that the airlines would use in their advertisements.

Under the previous law, before 2011, airlines could have advertised this price in DC newspapers:

“Fly to Barcelona — Only $157!*”

Clearly, no one can fly to Barcelona and come home for only $157. Even today round-trip international tickets are highly discounted vis a vis one-way tickets.

According to DOT, “Consumers have consistently confirmed that advertising of prices below the total cost of travel causes confusion. In 2006, the last time the Department considered this issue, it received over 700 responsive comments, “nearly all from individuals who are not travel professionals,” and nearly 500 of whom favored requiring a total price inclusive of taxes and fees. 71 Fed. Reg. 55398, 55399 (2006).

With the full-fare advertising rule, the advertised price would look more like this:

“Fly to Barcelona — Only $737!

Airfare: $314 • Taxes & Fees: $422

Airlines took the DOT to court about this rule. They claimed a constitutional dimension that the rule was made capriciously and that the regulation violates the airlines’ free speech rights. Of course, this was dismissed by DOT as ludicrous. (USCA Case #11-1219 Document #1322650 Filed: 08/04/2011)

As anyone who has purchased gasoline at the pump can attest, there is nothing novel about requiring sellers to reveal to consumers the full cost of the service offered, particularly where an item is subject to special taxes and fees beyond the generally applicable sales tax.

The airlines, after losing court cases at the US Court of Appeals for the District of Columbia Circuit and after failing to convince the Supreme Court to hear the case have attempted to introduce legislative language into the FAA Reauthorization Bill allowing this deceptive practice to be legalized. Language allowing this deceptive practice was passed by the House of Representatives but never gained traction in the Senate. Now, the airlines are proposing that the Trump administration eliminate the DOT full-fare rules.

The Full-Fare Advertising Rule protects airline consumers from unfair and deceptive advertising.

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