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TomFoolery
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Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:24 pm

It appears that legislation in the US is gaining traction which will allow airlines to advertise fares without taxes.

http://www.insidesocal.com/aviation/...-without-including-taxes-and-fees/

For clarity, the proposed legislation is as follows (http://beta.congress.gov/bill/113th-congress/house-bill/4156/text):

To amend title 49, United States Code, to allow advertisements and solicitations for passenger air transportation to state the base airfare of the transportation, and for other purposes.

In general.--It shall not be an unfair or deceptive practice under subsection (a) for a covered entity to state in an advertisement or solicitation for passenger air transportation the base airfare for the air transportation if the covered entity clearly and separately discloses--
''(A) the government-imposed taxes and fees associated with the air transportation; and
''(B) the total cost of the air transportation.

I am curious exactly where the airline imposed fees will fit in. Fuel surcharges, and those other fees. Sure, 20% of the fare is taxes, but when I book a ticket over the Atlantic, taxes and fees generally make up more than the base fare itself, and only a portion is actually government imposed.

Tom
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LAXintl
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:29 pm

  

This how it was only a couple years ago until an activist DOT head decided with Congress to change things and bury the taxes into the prices.

Enough people (including ones in Congress) now realize that breaking out pricing is actually good and lets the consumer see what they are paying for including which portion actually goes to the airline.
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mercure1
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:35 pm

I think it was silly political move to force airlines to advertise only single total pricing which hid the very high taxes included in air travel.

Better logic is letting the airline advertise their fares based on what they are actually earning, with separate accounting for added required taxes and fees.

So if Spirit Airlines want to advertise a $9 ticket, they should do so, not have to say its a $36 ticket today due to all the fees and taxes involved.
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Osubuckeyes
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:36 pm

Quoting LAXintl (Reply 1):
Enough people (including ones in Congress) now realize that breaking out pricing is actually good and lets the consumer see what they are paying for including which portion actually goes to the airline.

I agree with this as long as everything that is carrier imposed is disclosed in the "base fare." Otherwise deceptive tactics can be used by advertising LAX-JFK for $59 RT with a $100 each way fuel surcharge undisclosed until purchase.
 
FlyPNS1
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:38 pm

Quoting LAXintl (Reply 1):
Enough people (including ones in Congress) now realize that breaking out pricing is actually good and lets the consumer see what they are paying for including which portion actually goes to the airline.

Except that consumers really don't care how much goes to taxes and how much goes to airlines. They just want to know how much they will pay and who is cheapest.

Let's say I had two tickets: Ticket A ($80 goes to airline and $20 goes to tax) or Ticket B ($50 goes to airline and $30 goes to tax)...which one will most consumers pick? Of course, Ticket B because that's the cheapest.

There has been absolutely no outcry from consumer groups to go back to the old way of showing fares. The only reason we are going back is because of lobbying from airlines and a few key Congressmen. It will also allow airlines to create new fees that they can bury in the "Taxes" section of the fare after they've hooked a consumer in....this is the real reason the airlines want this.
 
kiwiandrew

RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:47 pm

Sounds like a major step backwards to me.

When I want to buy something I want to know the real price i. e. exactly how much I have to pay to obtain a particular product or service. If something is advertised as $99.00 I expect that's what I have to pay for it, not $99.00 + x% + some random number. It drives me nuts when I visit the US, see something advertised for $xx.xx , then find out when I go to pay that the real price is completely different from the advertised price. It always amazes me that consumers tolerate this blatantly dishonest $XX.xx (plus taxes) pricing model.
 
Viscount724
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:47 pm

Quoting mercure1 (Reply 2):
I think it was silly political move to force airlines to advertise only single total pricing which hid the very high taxes included in air travel.

Better logic is letting the airline advertise their fares based on what they are actually earning, with separate accounting for added required taxes and fees.

I disagree. I think 99% of passengers are only interested in the final total price and could care less how much goes to the airline and how much goes to governments and airports. If fares are quoted without taxes, it gives customers a false picture of what they'll really have to pay.

It's the same with VAT on prices of anything in Europe. It's always included in the quoted price although broken out on receipts.
 
rwsea
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 8:51 pm

How is this a good thing for consumers? All it will do in reality is make it more difficult to compare among airlines and for consumers to understand what they are really buying.

And are airlines now going to get even more creative and leave things like "fuel surcharges" out of the pricing?

This is a poor idea all the way around. Bad for consumers.
 
Scorpio
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:12 pm

Quoting Viscount724 (Reply 6):

   This. I don't see how this could possibly be seen as a positive thing. Having just come back from the US, it was bloody annoying that the prices advertised for pretty much anything were never the prices you actually paid. When I buy something, I want to know how much it's going to cost me from the beginning. It's not my main concern how much of it goes to the airline: if I see an ad for a $9 ticket, that's what I expect to pay. If that's not what I'm paying in the end, don't advertise it that way!
 
gabrielchew
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:15 pm

Why are Americans so obsessed with not having taxes included in the price? It is singularly the worst thing about travelling around America (or maybe it's the knowledge that half the people around you are secretly packing heavy duty artillery) - going into a shop, seeing something you want, then not knowing exactly how much it costs until you get to the check out....so annoying and unhelpful. It's the same in Singapore where restaurant prices are advertised as S$15++....what the hell is the price? If I try and give you S$15, you're definitely not going to be pleased.

I couldn't care less if a $5 t-shirt is taxed is 1% or 99%, as I pay the same $5 for the item either way. If tax isn't included, then advertising the t-shirt for $0.05 isn't very helpful, is it? I am never going to be able to get the t-shirt for the advertised price.

I don't want to see big headline "Fly to London for $50!" ad, only to go through the booking process and find that the fare is actually $500. I want to see the price is $500, and when I get my credit card out, I pay $500.

I believe some airline systems are already set up for agents so that the base fares are listed intially...those with the cheapest base fare come up first. The lower the base fare, the more tax the airlines can heap on afterwards, but still have "the cheapest fare". In reality the base fare and the final price bare little resemblance to each other. Case in point, BA were advertising a special DUB-CTU fare for Euro 10 yesterday.....have a guess what the actual price was. EUR 410. The EUR 10 advertised is a pointless marketing scam.

All excluding the tax does is make things look cheaper than they actually are....how is that helpful? At best it gives the impression that a) items are cheap, b) the Government is taking all your hard earned money. In reality the government is taking your money anyway, and you are being deluded into thinking something costs less than the price you can get it for. Thank goodness the EU legislated that prices need to be shown in full.

[Edited 2014-04-17 14:22:13]
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:15 pm

Quoting Kiwiandrew (Reply 5):
Sounds like a major step backwards to me.

When I want to buy something I want to know the real price i. e. exactly how much I have to pay to obtain a particular product or service.

   This is going to make shopping for an airline ticket a minefield. It's a horrible idea.

Quoting rwsea (Reply 7):
This is a poor idea all the way around. Bad for consumers.

  
 
MSPNWA
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:19 pm

To me the old way is the better of two evils. The new rules were not friendly to the airlines or the consumer. Airlines had to advertise prices that were well above what they actually charged, and consumers had high taxes well-hidden from view. They may not have been totally clear, but the old rules showed a final price and taxes far more easily than the new rules showed the breakdown of taxes and how much the airline actually was charging. I welcome going back.
 
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:22 pm

Quoting MSPNWA (Reply 11):
They may not have been totally clear, but the old rules showed a final price and taxes far more easily than the new rules showed the breakdown of taxes and how much the airline actually was charging.

The problem is that under the old rules you didn't see the actual total cost until after you had selected your options and gone most of the way through the process. At the stage where you were looking at fares from an aggregator or search engine, you were comparing apples and oranges. Now at least you know that you can actually compare the fares you find.

This is doubly true now that so much of the carrier's part of an airline ticket is considered "surcharges" rather than base fare. We are going to see a bunch of $29 fares advertised in aggregators that turn into $250 fares when your card is charged.
 
Flighty
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:23 pm

Fuel surcharges are a deceptive practice and should be banned. A price is a price. If it does not include fuel (or maintenance, or a crew) then the published price is dishonest and bordering on swindle.

Tax is tax. That is commonly understood. I think it should be broken out. It is not illegal to inform (speak to) customers about tax.

[Edited 2014-04-17 14:27:29]
 
SpaceshipDC10
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:23 pm

I'm all for advertising the price I'll have to pay, whether for an airline ticket, a drink or anything else. If in the case of airline tickets they really want/need to show/know how much added taxes they have to pay, then it could be written in non-bold and smaller font something like 'including $xx for airports taxes and security'. At the end of the day, what matter is what I have to pay.
 
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LAXintl
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:24 pm

Unfortunately the airline industry and travelers have become a favorite tax revenue source.

Tickets pricing might be going up, but airlines are not the bad guys. Its government.

Shinning light on this by separating the two helps clarify what portion is what of that $99 ticket that you are trying to buy belongs to whom.

As we can see, taxes have gone from an average of 7% of the ticket price in the 1970s to proposed 26% in the 2015 budget.


http://www.airlines.org/Documents/A4A_ProposedTaxes_14.jpg

=
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:32 pm

Quoting LAXintl (Reply 15):
Unfortunately the airline industry and travelers have become a favorite tax revenue source.

Tickets pricing might be going up, but airlines are not the bad guys. Its government.

Shinning light on this by separating the two helps clarify what portion is what of that $99 ticket that you are trying to buy belongs to whom.

In other words, publicity for the airlines' political agenda is more important than clarity for consumers.

This argument also doesn't address the fact that taxes are far from the only items that airlines have taken out of base fare in recent years. If the legislation required all airline charges to be included in the base fare, it wouldn't be quite as bad. But instead there's absolutely nothing in it to prevent the $9 advertised fare that happens to require $241 in fuel/crew/bag surcharges added after the first click.

[Edited 2014-04-17 14:33:37]
 
gabrielchew
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:38 pm

Quoting MSPNWA (Reply 11):
To me the old way is the better of two evils. The new rules were not friendly to the airlines or the consumer. Airlines had to advertise prices that were well above what they actually charged, and consumers had high taxes well-hidden from view. They may not have been totally clear, but the old rules showed a final price and taxes far more easily than the new rules showed the breakdown of taxes and how much the airline actually was charging. I welcome going back.

The "taxes" charged are only hidden from view if the airline wants to hide it. There is nothing stopping American airlines from breaking things down fully.

Case in point, this is from a recent BA flight I took:

The payment total is clear from the outset...it's GBP 36.98. This bares no resemblance to the "fare" paid of GBP 4
http://i129.photobucket.com/albums/p207/shefgab/1-3.jpg

Further down it shows what tax I've paid to whom....couldn't be simpler. Either way, I don't care that my fare was £4, or what percentage of the rest is actually airport fees or government fees or fuel surcharges.
http://i129.photobucket.com/albums/p207/shefgab/2-3.jpg

Who wants to be told that you can fly for £4, when the actual amount you have to pay is £36.98?
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jetblastdubai
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:39 pm

The actual breakdown from my last flight......

Fare Breakdown
Airfare: 3,870.00 AED
Equivalent Airfare: 1,054.00 USD
U.S. Customs User Fee: 5.50
U.S. Immigration User Fee: 7.00
U.S. APHIS User Fee: 5.00
U.S. Federal Transportation Tax: 35.00
September 11th Security Fee: 10.00
United Arab. Passenger Service Charge: 20.40
UAE Passenger Security and Safety Fee: 1.40
UAE Passenger Information Fee: 1.40
Germany Airport Security Charge: 9.10
Germany Passenger Service Charge: 28.70
International Surcharge: 539.30
U.S. Passenger Facility Charge: 12.00
Per Person Total: 1,728.80 USD

I think consumers should know just how much of their ticket price is going to the airline and how much is going other agencies.
 
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MillwallSean
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:42 pm

Why anyone want to get a price that isnt the real price is beyond me. When i book all I want displayed is the final price I have to pay. Whats included is irrelevant and whether its tax, fuelcosts, airplane depreciation or 10 cent for the design of the flight attendants new dress is completely irrelevant.
Give me the total cost of the ticket, nothing else.

Those interested in a breakdown can get that on an invoice etc.

Well as long as the US Americans are happy about their system.
At least for me Europe (EU) has gone the other way and forces airlines to display the total price. Suits me and I guess the Europeans.

This obsession with taxes is absurd. Its normal to pay taxes when flying.
Some of the worlds best airports, Singapore Changi for instance takes out a higher fee than its neighbour and competitor KLIA.
What I don't approve of is fuel surcharge. Fuel is part of the price and the idea that airlines tries to add it to a price later is to me as close to fraud as you can come. I dont see an added fuelsurcharge on my groceries, on clothes etc so why airlines gets away with this is beyond me. Should be outlawed.
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LAXintl
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:43 pm

Quoting gabrielchew (Reply 17):
The "taxes" charged are only hidden from view if the airline wants to hide it. There is nothing stopping American airlines from breaking things down fully.

Yes there is. The 2011 DOT law. Airlines asked to be able to breakout taxes and fees separately in fare advertisements but were denied by DOT.

Some airlines like Spirit, Allegiant and Southwest Airlines in 2012 even filed lawsuit against the US government.
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:49 pm

Quoting jetblastdubai (Reply 18):
I think consumers should know just how much of their ticket price is going to the airline and how much is going other agencies.

That listing is totally deceptive and a perfect illustration of the problem. Buried inconspicuously among 11 small to medium taxes there is an "International Surcharge" of $539.30 which is imposed by the airline, required to fly the itinerary, and should be part of the base fare. They are trying to fool the consumer into thinking that $540 of the total cost is taxes when it's not. That should be banned.
 
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CCA
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:52 pm

Australia made it law a few years ago to include taxes, as said above consumers want to know how much money is going to leave their wallet so to speak. You can no longer advertise a $1 fare as it's totally misleading.

I like others don't care about taxes I just want to know how much it's going to cost full stop!
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Tango-Bravo
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:55 pm

Quoting FlyPNS1 (Reply 4):
The only reason we are going back is because of lobbying from airlines and a few key Congressmen. It will also allow airlines to create new fees that they can bury in the "Taxes" section of the fare after they've hooked a consumer in....this is the real reason the airlines want this.

  I can think of no plausible explanation other than this. Athough U.S. airlines did not invent bait-and-switch or smoke-and-mirrors, their marketing departments have perfected the "art" of both (especially post-deregulation) and have no doubt been impatiently awaiting the day when they could once again play their deceptive (albeit legal) pricing games by hiding the true cost of air travel.

[Edited 2014-04-17 15:05:40]
 
Wingtips56
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 9:59 pm

Most important to me as the consumer is to see the total price I'll have to pay in the big font. I wouldn't mind then seeing a breakout of the fare and tax, but I want to be hit clean in the face with the grand total out of pocket. By fare, I mean every penny going to the airline, so that's the actual base fare + fuel surcharges + other surcharges + stopover charges, etc. That should also include obligatory ticketing/reservation/boarding pass fees if I have no alternative but to pay them. They can be detailed "below the line" if they would not always apply, varying by how I made my purchase. The tax should then include only the legislated government taxes and fees.

If the Legislature or DOT wants to tinker with the legislation, then while at it, they should indeed ban the splitting out of the fuel and other surcharges, requiring them to be regarded simply as Fare. When I started in the airline business in 1979 nobody would have considered the fuel as something extra or optional, and it shouldn't be now. That's like pricing a Big Mac based on the "Special Sauce, lettuce, cheese, pickles, onions on a sesame-seed bun" without the "two all-beef patties". Oh, did you want meat with your hamburger?
  
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rwsea
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 10:02 pm

Quoting LAXintl (Reply 20):
Yes there is. The 2011 DOT law. Airlines asked to be able to breakout taxes and fees separately in fare advertisements but were denied by DOT.

What the DOT denied them the ability to do was to list a cheap base fare without listing the taxes and the full price to be paid. There's nothing stopping the airlines from breaking down the amount of taxes included within the TOTAL price. Many already do this (United for example).
 
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mercure1
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 10:09 pm

I think those in places like Europe have been lulled into accepting whatever government does with taxes.

Maybe one does not realize but taxes can be upwards of half the price on some goods, at no fault of the seller.

As consumer I rather see the price the merchant competes on without taxes and then be slapped with taxes at checkout so I can understand what those government are doing to me directly.

Hiding mandated taxes and fees in an all inclusive fee blurs the lines and makes us all unaware of what is really going and not seeing what the merchant is truly offering us.
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Scorpio
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 10:16 pm

Quoting mercure1 (Reply 26):
I think those in places like Europe have been lulled into accepting whatever government does with taxes.

It's nothing to do with being 'lulled into accepting whatever government does with taxes', everything to do with knowing exactly how much you're going to pay from the beginning. If I want to know how much of what I'm paying is taxes I'll check that on my receipt or right there on the website when I book. I do NOT want to be lulled into booking a flight for an advertised price that's a lot lower than what I'm actually going to end up paying.
 
Eagleboy
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 10:16 pm

Quoting Kiwiandrew (Reply 5):
Sounds like a major step backwards to me.
Quoting FlyPNS1 (Reply 4):
There has been absolutely no outcry from consumer groups to go back to the old way of showing fares. The only reason we are going back is because of lobbying from airlines and a few key Congressmen. It will also allow airlines to create new fees that they can bury in the "Taxes" section of the fare after they've hooked a consumer in....this is the real reason the airlines want this.

Yup airlines want to be able to display the lowest "headline fare" hat they are allowed to.

Better to make them display the total and then break it down when the pax go to actually make the purchase.
 
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777Jet
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:06 pm

Quoting Kiwiandrew (Reply 5):
Sounds like a major step backwards to me.

When I want to buy something I want to know the real price i. e. exactly how much I have to pay to obtain a particular product or service.

Likewise, all I care about is the total price...

I have seen two $1,000 tickets on different airlines. One was about $600 in air fare and $400 in taxes where as the other was about $850 in air fare and $150 in taxes. Do you think I cared how the fare was made up? My credit card doesn't care as it will be charged the total price! The fares were the same so I chose the Airline that I wanted to fly or that best suited my needs.

I doubt many people at all would (assuming both airlines are similar in quality and status is not an issue) pay more in total price just to fly an airline that advertises a lower base fare and makes it look like the 'taxes' make up most of the cost...

[Edited 2014-04-17 16:07:42]
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:18 pm

Quoting 777Jet (Reply 29):
I have seen two $1,000 tickets on different airlines. One was about $600 in air fare and $400 in taxes where as the other was about $850 in air fare and $150 in taxes.

This just reinforces my point. I doubt any ticket was actually $600 fare/$400 taxes. Most likely the difference is that one of the fares had a huge fee imposed by the airline that was hidden among the listing of taxes and government fees.
 
GSPSPOT
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:21 pm

They just need to provide the "out the door" price including all taxes & fees so people can make true, apples-to-apples comparisons. If you're going to have to pay the taxes/fees anyway, why NOT include them in pricing quotes? It only makes sense to do so.
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klkla
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:33 pm

There is nothing stopping the airlines from showing how much of the ticket cost today is from taxes and fees. In fact, it already shows in your flight details.

This legislation is a pure and simple attempt by the Republican controlled House to allow airlines to mislead consumers about advertised ticket prices. Hopefully the Senate will NOT go along and if they do hopefully President Obama will veto the bill. There is no benefit to the consumer in this legislation.
 
peterinlisbon
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:42 pm

Personally, I don't really need to know what proportion of what I pay goes to the goverment, any more than I need to know what proportion of the ticket price they spend on fuel, catering or cleaning. I especially don't want to see a fare advertised, only to find out that the real price is much higher only after having wasted time entering all of my details. I really like the EU rules that force them to advertise the total price. They can always provide a detailed breakdown of all of the taxes below the headline price for anyone that's interested (which most people really aren't).
 
AADC10
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:42 pm

I think what needs to happen is that all fees and taxes should be rolled up into the price for everything, not roll back the rules for airlines. Hotels often do not show the price including the local bed tax. Many countries show the price including VAT or whatever, not the price less sales tax.

Everyone should advertise the actual price that would have to be paid. It is misleading to consumers if they have to find the actual cost after tax, fees and whatever, especially since it varies from jurisdiction to jurisdiction. If the retailer want to provide a tax breakdown, that is their business, and it probably should be listed upon purchase. This is just another tactic to highlight taxes to consumers, even though USA residents overall have a rather light tax burden, albeit regressive.
 
MSPNWA
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:50 pm

Quoting LAXintl (Reply 20):
Yes there is. The 2011 DOT law. Airlines asked to be able to breakout taxes and fees separately in fare advertisements but were denied by DOT.

That shows the real motive behind the law change. The point all along was to better hide government taxes and fees behind a shield of improved consumer clarity.

Surcharges and such have gotten ridiculously out of hand, but you can't right the wrong with another wrong.
 
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RWA380
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RE: Airlines May Soon Advertise Fares Without Taxes

Thu Apr 17, 2014 11:52 pm

Quoting FlyPNS1 (Reply 4):
Except that consumers really don't care how much goes to taxes and how much goes to airlines. They just want to know how much they will pay and who is cheapest.
Quoting Viscount724 (Reply 6):
I disagree. I think 99% of passengers are only interested in the final total price and could care less how much goes to the airline and how much goes to governments and airports. If fares are quoted without taxes, it gives customers a false picture of what they'll really have to pay.

        

Quoting gabrielchew (Reply 9):
Why are Americans so obsessed with not having taxes included in the price?

We aren't, that is a very generalized statement that would be like saying why do all Brits eat fish and chips and drink tepid beer?

Quoting gabrielchew (Reply 9):
going into a shop, seeing something you want, then not knowing exactly how much it costs until you get to the check out....so annoying and unhelpful

Next time you visit America, come to Oregon, We have a beautiful coastline, with a vast mountain range that has skiing, hiking and beautiful lakes and streams, we also have no sales tax, and tons of outlet stores and major retailers.

Quoting MSPNWA (Reply 11):
consumers had high taxes well-hidden from view.
Quoting Flighty (Reply 13):
I think it should be broken out.

The taxes are not hidden, I can guarantee you when you buy an airline ticket online or any other means, you get a breakdown with the fare and taxes separated out. There is no deception, and the consumer can easily determine which part is tax and which part is fare.
707 717 720 727-1/2 737-1/2/3/4/5/6/7/8/9 747-1/2/3/4 757-2/3 767-2/3/4 777-2/3 DC8 DC9 MD80/2/7/8 D10-1/3/4 M11 L10-1/2/5 A300/310/320
AA AC AQ AS BA BD BN CO CS DL EA EZ HA HG HP KL KN MP MW NK NW OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN WP YS 8M
 
Pyrex
Posts: 4821
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RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:13 am

This is a good thing. It aligns advertisements for airlines tickets in the U.S. with that of most other goods (fuel at gas stations being the main exception).

Quoting TomFoolery (Thread starter):
I am curious exactly where the airline imposed fees will fit in. Fuel surcharges, and those other fees

I didn't read the text of the bill but the excerpt you posted above seems to indicate that you are only allowed to break out government-imposed fees.

Quoting mercure1 (Reply 2):

I think it was silly political move to force airlines to advertise only single total pricing which hid the very high taxes included in air travel.

Better logic is letting the airline advertise their fares based on what they are actually earning, with separate accounting for added required taxes and fees.

Yup.

Quoting FlyPNS1 (Reply 4):

Except that consumers really don't care how much goes to taxes and how much goes to airlines.

They should. Just as they should care how much of their salary comes out of their paycheck (including payroll taxes supposedly paid by the employer, but in reality coming out of their paychecks). If people had to mail a check to the IRS every year (or every quarter) instead of having taxes withheld every month only to get a "refund" every April politicians would be a lot more responsible with money...

Quoting gabrielchew (Reply 9):
Why are Americans so obsessed with not having taxes included in the price?

It could be because in the U.S. every jurisdiction can impose their own sales taxes, which would make advertising with all taxes impossible. Then again, it is probably because of this:

Quoting mercure1 (Reply 26):

I think those in places like Europe have been lulled into accepting whatever government does with taxes.

Yep. Just glad to have anything the government allows them to keep at the end of the month.

Quoting AADC10 (Reply 34):
It is misleading to consumers if they have to find the actual cost after tax, fees and whatever, especially since it varies from jurisdiction to jurisdiction.

That is precisely why prices should be advertised without taxes. If companies were forced to make advertisements with all taxes involved, regardless of the jurisdiction, what would stop Smalltown, NY from imposing an 80% sales tax on everything sold on their territory? The size of the sales in their territory are probably too small to make much of a difference in the nationwide price so they would be incentivized to try to take as much as possible. It would be a tax death spiral.
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Mir
Posts: 19491
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RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:17 am

Quoting Kiwiandrew (Reply 5):
Sounds like a major step backwards to me.

It is, unless the airline displays the taxes right next to the base fare. If an airline wants to sell a ticket for "$99 plus $24 taxes" instead of "$123", that's fine with me, because I can still do basic math in my head and figure out right away how much I'm going to pay. What shouldn't be allowed is for airlines to advertise the $99 fare and then only inform me of the extra $24 in taxes when I go to pay.

Quoting Kiwiandrew (Reply 5):
It drives me nuts when I visit the US, see something advertised for $xx.xx , then find out when I go to pay that the real price is completely different from the advertised price. It always amazes me that consumers tolerate this blatantly dishonest $XX.xx (plus taxes) pricing model.

It is ridiculous, and the day it goes away cannot come too soon. But, unfortunately, that day isn't coming soon at all.

Quoting jetblastdubai (Reply 18):
I think consumers should know just how much of their ticket price is going to the airline and how much is going other agencies.

That's fine, but it shouldn't come at the expense of knowing up front how much you're going to pay in total for the ticket.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
GSPSPOT
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RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:22 am

Quoting Mir (Reply 38):
What shouldn't be allowed is for airlines to advertise the $99 fare and then only inform me of the extra $24 in taxes when I go to pay.

EXACTLY!
Great Lakes, great life.
 
FlyPNS1
Posts: 5535
Joined: Wed Dec 01, 1999 7:12 am

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:22 am

Quoting LAXintl (Reply 15):
As we can see, taxes have gone from an average of 7% of the ticket price in the 1970s to proposed 26% in the 2015 budget.

Air transportation is a costly service to provide. You need security, infrastructure and a vast array of ATC systems/infrastructure/people to make it work. That costs money. Remember for that $63 in tax, you get the safest and most efficient method of long-haul transportation known to man kind.

And quite frankly, with carriers like DL rolling in 3 Billion dollar annual profits, I don't think the airlines are going to find any sympathy. Even if taxes were reduced, consumers would see none of the savings. It would all go to airline profits.
 
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:32 am

Quoting Pyrex (Reply 37):
I didn't read the text of the bill but the excerpt you posted above seems to indicate that you are only allowed to break out government-imposed fees.

I read the text of the bill. At first glance your interpretation is how it reads: "base airfare" is defined as "the cost of passenger air transportation, excluding government-imposed taxes and fees." But that wording bothers me, and it's because there is no specific prohibition against the airline not counting things like fuel surcharges in "the cost of passenger air transportation." I think the addition of the word "total" between "the" and "cost" would serve that purpose... and I think there's a good reason why neither "total" nor any other specific wording is in there.

I see this language as an open invitation to airlines to advertise $9 fares with $241 fuel surcharges and then, if challenged, argue "that fee is not part of the cost of passenger air transportation, but is imposed in addition to the cost of such transportation to recoup extraordinary fuel expenses."

Quoting Pyrex (Reply 37):
That is precisely why prices should be advertised without taxes. If companies were forced to make advertisements with all taxes involved, regardless of the jurisdiction, what would stop Smalltown, NY from imposing an 80% sales tax on everything sold on their territory? The size of the sales in their territory are probably too small to make much of a difference in the nationwide price so they would be incentivized to try to take as much as possible. It would be a tax death spiral.

Except that this is how prices are handled in most other places in the world, and there hasn't been a "tax death spiral" in most of them.

[Edited 2014-04-17 17:33:46]
 
Mir
Posts: 19491
Joined: Mon Jan 05, 2004 3:55 am

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:38 am

Quoting Pyrex (Reply 37):
It aligns advertisements for airlines tickets in the U.S. with that of most other goods

Except that what should be happening is advertisements for other goods aligning themselves with airline tickets. Much better that way, and far less misleading.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
ZKCIF
Posts: 425
Joined: Sat Oct 09, 2010 8:18 pm

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:47 am

Quoting Pyrex (Reply 37):
That is precisely why prices should be advertised without taxes. If companies were forced to make advertisements with all taxes involved, regardless of the jurisdiction, what would stop Smalltown, NY from imposing an 80% sales tax on everything sold on their territory? The size of the sales in their territory are probably too small to make much of a difference in the nationwide price so they would be incentivized to try to take as much as possible. It would be a tax death spiral.

1. in this case all airlines stop serving smalltown airport within 24 hours, they move to normaltown airport.

2. in lithuania, there is a saying "an imbecil is beaten up in(side) church as well" (glušą ir bažnyčioj muša). if you guys from america adore taking your time checking fees and hidden taxes and find it interesting/ entertaining, that's nice, you're a free country. on our side of the pond, we keep it simple and boring. but if i were you, i would care about my aunty/granny in her seventies who might want to pay 9usd for her ticket and end up paying 499usd fuel surcharge. i love my aunt being protected from malevolent businesses.
 
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DocLightning
Posts: 22137
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RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:49 am

Quoting LAXintl (Reply 15):
Shinning light on this by separating the two helps clarify what portion is what of that $99 ticket that you are trying to buy belongs to whom.

You'll get no argument from me that taxes and fees on a ticket are too high.

But I want to see what I'll be paying. That to me is far more important than some silly political awareness campaign.

The airlines can make a big deal of how much of a fare is taxes and fees without unbundling the prices.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
kiwiandrew

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 12:54 am

If it's something I can opt in or out of, by all means separate it. If it's something I have to pay in order to receive the service I want it included up front ( it can always be broken down in the fine print).
 
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zippyjet
Posts: 5189
Joined: Tue Sep 04, 2001 3:32 pm

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 1:00 am

Then our industry can advertise like those But Wait There's More! infomercials. For the low low price of $19.95 you can fly nonstop from FLL to MIA! And you also get... And then there can be the requisite rapid craw in lillipution letters with all the taxes, other charges etc.
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Pyrex
Posts: 4821
Joined: Thu Aug 25, 2005 7:24 am

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 1:03 am

Quoting seabosdca (Reply 41):
Except that this is how prices are handled in most other places in the world, and there hasn't been a "tax death spiral" in most of them.

In most places there is an alignment between the geography of the taxation and the advertising. In Europe VAT is set on a country by country basis, and advertisement is done the same way. You don't see many advertisements in Portuguese trying to lure consumers in Lithuania...

Quoting ZKCIF (Reply 43):

1. in this case all airlines stop serving smalltown airport within 24 hours, they move to normaltown airport.

It wouldn't start at 80%, something lower. It would end up in whatever amount of taxes municipalities could get away with without completely bankrupting a company.

Plus, there is the whole thing of alignment between taxation and representation. Why should a consumer in a state that does not have sales taxes be forced to pay for those in a state that does?
Read this very carefully, I shall write this only once!
 
Mir
Posts: 19491
Joined: Mon Jan 05, 2004 3:55 am

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 1:16 am

Quoting Pyrex (Reply 47):
In most places there is an alignment between the geography of the taxation and the advertising.

As is there in the US.

Quoting Pyrex (Reply 47):
Why should a consumer in a state that does not have sales taxes be forced to pay for those in a state that does?

If the sale is made in a state that does have them, why shouldn't they pay the sales taxes?

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
Pyrex
Posts: 4821
Joined: Thu Aug 25, 2005 7:24 am

RE: Airlines May Soon Advertise Fares Without Taxes

Fri Apr 18, 2014 1:29 am

Quoting Mir (Reply 48):
If the sale is made in a state that does have them, why shouldn't they pay the sales taxes?

That is the point. If you mandate all advertisement to be done with all taxes included then companies would need to adjust for an average nationwide tax expense and you would get hit with it regardless of where you make the purchase. Since presumably it would be too expensive for Subway to advertise a $5 footlong in New Hampshire, a $5x(1+8.885%) footlong in New York, etc. (and it would actually get a lot more complicated than that since some places might have different taxation for food vs other items, etc.) the consumer buying a crappy sandwich in soggy bread in Manchester, NH would be paying a higher price because someone in NY decided to elect in their jurisdiction some state or local politicians that likes high taxes.

[Edited 2014-04-17 18:29:55]
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