What has Washington got against airline passengers?

Despite a historic effort by the enforcement office of the Department of Transportation (DOT) to beef up consumer protections and the creation of the Advisory Committee for Aviation Consumer Protections, the rest of the government is still handing consumers the short end of the stick.

The House jammed the Orwellian-named Transparent Airfares Act down consumers’ throats. The USAirways/AA merger was approved by the Justice Department. The Norwegian International Air petition to start service across the Atlantic was denied (or slow-tracked). The current DOT rulemaking was held up in the Office of Management and Budget for more than a year. And, Congress has decided that airline passengers are their personal piggy bank by adding more government-mandated fees on top of the scores of airline fees that consumers face.

Don’t lawmakers and civil servants feel that their main job is to protect their constituents, the public? Or, has Washington really gone over to the dark side where only money and campaign donations are important and obeisance to the almighty dollar is paramount.

Transparent Airfares Act of 2014
When consumer stalwarts like Rep. Peter DeFazio come down on the side of the airlines against consumers, some might think the bill that he co-sponsored with such a promising name might actually deliver some benefits to consumers. But, that’s not so.

His claim that the proposed bill will allow consumers to know the government-imposed taxes and fees they are paying on airline transportation is hollow. That protection is already available under the very DOT rules that the new bill seeks to replace. However, most airlines choose not to tell passengers about these taxes and fees.

Taxes and fees can be included in advertisements. They can be added to ticket itineraries that consumers get when making online bookings. They can be included next to the Sudoku games and weather every passenger seems to get printed out on boarding passes. But, airlines choose not to.

The real benefit of this bill is to enshrine in law the pernicious practice of drip pricing, a form of bait-and-switch advertising.

TU_Ad_350-350Approval of USAirways/AA merger
When the Department of Justice had the opportunity to stop the merger of US Airways with American Airlines, it folded its cards. Even though consumer studies clearly showed that the merger would dramatically eliminate competition, Justice allowed the merger to move forward with some significant tweaks to landing slots at Washington Reagan Airport and La Guardia in New York and minor changes elsewhere.

The bottom line — The airlines’ bottom lines have never been better. With less competition and airlines colluding by keeping capacity “in control” through “capacity discipline,” consumers are facing increasing airfares and fewer choices.

Norwegian International Air service denial
Only last week, DOT (a different office than the enforcement division) denied Norwegian Air International permission to expand their service across the Atlantic between Europe and the United States.

Though consumers would benefit by the first meaningful competition to the giant airline alliances that DOT has allowed to grow, DOT moved against the interest of consumers. Their actions were couched in terms that protect the airlines and airline unions from competition.

The Office of Management and Budget (OMB) delay of DOT proposed rules
These anti-consumer actions reach up to the White House offices. There at OMB, a rulemaking that had already been almost two years in the making and backed up with unprecedented economic studies and consumer interest, was delayed for more than a year. The normal OMB review process takes less than 90 days.

The result — consumers will have to wait longer for the return of the ability to comparison shop for airline tickets with the knowledge of the full cost of transportation. Currently, airlines withhold baggage and seat-reservation fees from consumers shopping through travel agencies (more than half of consumers) during the buying process.

Fortunately, this rulemaking is finally moving forward and is in the comment period where consumers can let the Department know about their needs for disclosure of prices for extra services and their desire for comparison shopping.

Increases in government fees
At the end of last year, the 9/11 Security Fee was more than doubled. Then, adding insult to injury, the administration ignored the will of Congress and changed the definition of “round-trip” to extract more funds from consumers. This increase in the fee levied on consumers was combined with hundreds of millions of dollars of deductions from the amounts that airlines used to pay for security.

Consumers were left with higher taxes and fees and the airlines were given a gift of hundreds of millions of dollars.

Now, the administration is back with requests to increase airport facility charges, customs and border protection fees and agriculture fees that will again almost double the extraction of money from airline travelers.

When will consumers come first?
The Transparent Airfares Act harms consumers, undoing years of consumer-protection efforts by the Federal Trade Commission and DOT. The denial of low-cost, transatlantic service by Norwegian Airlines stops meaningful competition. The delay of rulemaking at the White House takes away consumers’ ability to comparison shop and harms the free market. And, the imposition of increased government-imposed fees on airline passengers is simply unfair when the benefits of airline transportation support and grow the entire economy.

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