The media was full of stories last week about the Department of Transportation’s (DOT) requirement that advertised airfares include all taxes and fees, which goes into effect Jan. 26. But most stories missed the detail that promoting each-way fares “based on a required round-trip purchase” will still be allowed.
This means that a $220 fare you see advertised may not be the actual final price, after all — despite DOT’s much trumpeted pursuit of transparency and consumer protection. In its ruling last April that finalized the new requirements, it only demanded that the fine print be more prominent.
“The department is codifying existing enforcement policy, allowing sellers of air transportation to advertise an each-way price that is contingent on a round-trip ticket purchase, so long as the round-trip purchase requirement is clearly and conspicuously disclosed in a location that is prominent and proximate to the advertised fare,” the final ruling said.
I suppose it’s easy enough to double $220 and quickly arrive at the $440 round-trip price, if there is a notation next to the fare that a round trip is mandatory. But at the same time, isn’t it even easier to just put $440 instead of half that amount plus the fine print?
DOT said that its ruling “allows sellers of air transportation to be flexible in the way they advertise round-trip fares while still requiring all pertinent disclosures to consumers.”
Who are we kidding? The only reason airlines use this marketing ploy is to mislead and manipulate customers. They can easily prove me wrong by ending the practice.
“While the department understands that some consumers would prefer the full round-trip price to be displayed, the department has not found that the current regime has led to consumer confusion or deception, and it does permit certain types of advertising that are beneficial,” DOT said.
I’ve written about this issue several times, and it’s hard for me to see anything “beneficial” in false each-way fare advertising — for consumers, that is. I have no trouble seeing how this practice benefits airlines. As I’ve pointed out before, many airlines do advertise actual round-trip fares.
There is nothing wrong, of course, with promoting one-way fares that can indeed be purchased as such, without the round-trip requirement.
DOT has taken important steps to address false fare advertising — including fines on carriers that break the rules — but there is much more to be desired if it’s really serious about protecting consumers.
On a somewhat different note, the new rules also increase the denied-boarding compensation airlines are required to offer passengers who are left behind because their flight was oversold. Carriers usually try to entice volunteers with travel vouchers, but if that fails, they must give the affected customers cash or a check.
If such travelers’ new flights delay arrival at their final destination between 1 and 2 hours for domestic flights and between 1 and 4 hours for international ones, the compensation must be 200 percent of the one-way fare or $650, whichever is lower. For longer delays, the numbers go up to 400 percent of the fare or $1,300.
Airlines are exempt from these rules if the denied boarding is due to substituting the scheduled aircraft with a smaller plane, or if the plane has fewer than 30 seats. The rules don’t apply to international flights inbound to the United States, though the European Commission has even stricter rules for flights originating in the European Union.
Related stories:
DOT cracks down on airfare advertising
Proper airfare advertising comes to U.S.
Fare sales often lost in translation
When an airfare sale is not quite a sale
Airlines find new way to overcharge fliers
Continue reading about DOT keeps false ‘each-way’ airfare ads
When I landed at Tokyo’s Haneda Airport today, I had one of my easiest, fastest and smoothest international arrival experiences. But I wondered where all those airlines that last year fought and won a fierce battle over the right to fly to Haneda actually were.
It appears the industry overestimated Haneda’s appeal to travelers, and it also might have miscalculated how many passengers remain in Tokyo, as opposed to those who connect to other destinations.
It’s true that the March earthquake and tsunami had a negative impact on travel to Japan in general, but traffic to and from the much bigger Narita Airport has largely recovered.
Haneda’s smaller size and proximity to central Tokyo provide a significant advantage. However, as I first wrote two years ago, most medium- and long-haul flights arrive and depart between 10 p.m. and 7 a.m. — not exactly the most preferred time by the majority of travelers. In addition, onward flight connections from Haneda are extremely limited.
That didn’t seem to bother most airlines last year, when the rights to fly from various foreign cities to Haneda were being awarded by the Japanese and other governments. U.S. carriers in particular made rather bold proposals. In the end, the Department of Transportation gave American Airlines the right to fly from New York, Delta from Detroit and Los Angeles, and Hawaiian Airlines from Honolulu.
American’s flights are nowhere to be found in its winder schedule, though they are planned for next summer. The same goes for Delta’s Detroit flights. It does operate the LA flight throughout the year, as does Hawaiian on the Honolulu route. Air Canada has postponed indefinitely its plan for flights from Vancouver, even though it started selling tickets late last year.
The Japanese carriers have trimmed their plans, too. All Nippon Airways has kept only LA in North America, while Japan Airlines serves San Francisco. European and other long-haul routes are also very few.
British Airways is the only foreign carrier outside Asia and the United States that currently flies to Haneda — and not every day. The Asian carriers include Air China, Asiana, Cathay Pacific, China Airlines, AirAsia, China Eastern, Eva Airways, Korean Air, Malaysia Airlines, Shanghai Airlines, Singapore Airlines and Thai Airways.
Flights loads to and from Haneda are not what those carriers expected — my Singapore Airlines flight was less than half-full in Economy and about two-thirds full in Business Class, where I had two lie-flat seats to myself, though even one would have been just fine.
Related stories:
When ‘open skies’ aren’t really open
U.S. flights likely to Tokyo Haneda
Continue reading about Carriers lose appetite for Tokyo Haneda
The U.S. Department of Transportation (DOT) seems semi-serious about false airfare advertising. It fined several airlines this week for violating its rules of disclosing taxes and fees, but it still tolerates the disgraceful “one way based on a required round-trip purchase” manipulation practiced by some carriers.
Continental Airlines was fined $120,000 for failing to include fuel surcharges in fares listed on its website. US Airways and TACA, the Central American company, must pay $45,000 and $55,000, respectively, for the same wrongdoing — indicating that fares didn’t include taxes and surcharges, but not disclosing actual amounts.
“Consumers have a right to know the full price they will be paying for airfares,” said Transportation Secretary Ray LaHood. “We established airline price advertising rules to protect the consumer, and will take enforcement action when these rules are violated.”
Starting on Oct. 24, DOT will require airlines to include all taxes, surcharges and government fees in advertised fares — not just using asterisks and fine-print explanations.
However, advertising only half of a ticket price will continue. As I’ve written before, I have nothing against listing one-way fares — when they can be truly bought as such. To this day, American Airlines, Delta, British Airways, Lufthansa and others promote only half of mandatory round-trip purchases on their websites.
In fact, Lufthansa doesn’t even bother to spell out the words, using instead “OW based on RT purchase.” The German carrier doesn’t do those gimmicks on its European sites because of strict European Union rules.
In March, I wrote that United Airlines became the first major U.S. carrier to begin advertising predominantly round-trip fares on its site. Continental has since followed suit. US Airways still uses a mixed method.
One would hope this item will be next on DOT’s agenda.
Related stories:
Proper airfare advertising comes to U.S.
Fare sales often lost in translation
When an airfare sale is not quite a sale
Airlines find new way to overcharge fliers
Continue reading about DOT cracks down on airfare advertising
This should not be news, but it is: U.S. airlines have finally begun advertising some airfares properly, meaning they now show round-trip prices instead of the longtime marketing ploy of “each way based on a required round-trip purchase.” But those are just baby steps, as some taxes and fees are still being excluded.
When I wrote about false fare advertising in 2008, my copy editor at the Washington Times put this headline on my column: “Fare sales often lost in translation.” I compared the deliberately misleading airline practice to the mysterious “Twin Peaks” revelation “The owls are not what they seem.” I also wondered, If a round trip is required, why on earth is only half of the actual fare being advertised?
This month, United Airlines became the first major U.S. carrier to change its policy and advertise predominantly round-trip fares on its website — the only exceptions seem to be last-minute weekend specials. The airline is currently promoting five domestic and four international sales on its site, and they all include round-trip prices and fuel (YQ) surcharges — though some taxes and fees are excluded.
For example, a Business Class fare for a round trip from Los Angeles to Shanghai is shown as $3,513, while the total final price as of today is $3,572, if booked on nonstop flights. A round-trip Business Class fare from Washington to Rome is displayed as $2,411, and the final price is $2,460, if purchased today on nonstop flights. As you see, the differences are not that big.
All other carriers should follow suit. Continental and US Airways display some fares as round trips, but most of their advertising is still being done the old-fashioned way, as is American’s and Delta’s. Southwest, Alaska Airlines and Virgin America show one-way fares but don’t require round-trip purchases.
Although the Department of Transportation has looked into the issue and called on the industry not to deliberately mislead consumers, it has done nothing to stop the controversial practice. The European Union (EU), on the other hand, has been much more proactive on behalf of travelers. That’s why fares in Europe are advertised with the full ticket price.
Some of the European carriers that fly to the United States, such as Spain’s Iberia, are honoring the EU rules globally and displaying actual full prices on their U.S. websites as well. But others, such as British Airways, Air France and Lufthansa, while observing the rules on their home turf, have given in to the pressure from their U.S. competitors and adopted the “one-way based on a round-trip purchase” policy.
In January, all four above-mentioned European airlines offered the same fares from New York to London. The last three advertised $199, while Iberia showed $584, which is what the actual fare was, including all taxes and surcharges. Singapore Airlines, also having the guts to be honest with its customers, promoted a $586 fare from New York to Frankfurt that was truly the final price.
It’s high time the airline mentality of trying to trick customers changed once and for all.
Related stories:
Fare sales often lost in translation
When an airfare sale is not quite a sale
Airlines find new way to overcharge fliers
Continue reading about Proper airfare advertising comes to U.S.
The Indian government has done what authorities in most market economies would rarely dare to try — it has forced Indian carriers to slash domestic airfares by as much as a quarter, and to publish fare ranges on every route on their websites regardless of travel dates. While helping consumers is admirable, is New Delhi crossing a line?
Angered by the pricing policies of India’s airlines, including low-cost carriers IndiGo, SpiceJet and GoAir, the Directorate General of Civil Aviation (DGCA) gave them an ultimatum last weekend to lower fares or face severe consequences, the Indian press reported. Within hours, fares dropped between 20 and 25 percent.
On Monday, the DGCA ordered airline chiefs to start posting on their websites at the beginning of every month fares on specific routes with advance-purchase requirements of 21, 14 and seven days before departure, as well as last-minute prices.
“We just want everything to be made public, including giving DGCA the parameters of number of seats getting sold and fare moving to next higher level. In case of any sudden jump, we will be able to check if lower bucket fare seats have been sold, and then spot fares are at the highs or is it something else,” DGCA chief E. K. Bharat Bhushan was quoted as saying by the Times of India.
This column has been critical of several dishonest and manipulative practices in the airline industry, including misleading fare advertising. Transparency is essential in an era of ever-growing airline fees and heavy fuel surcharges. In October, I wrote about new ways some carriers have found to overcharge unsuspecting customers.
It’s well-known that Indian domestic fares had become ridiculously high, but was such a drastic government intervention necessary? The DGCA plans to micromanage airline fare-setting and inventory, which will effectively end dynamic pricing, the very essence of today’s industry model.
“In case of any sudden jump to the highest fare level, the DGCA will be able to check if the spurt is due to seats at lower price levels having been sold out or whether it is manipulation by the travel industry,” the Times of India wrote on Tuesday.
The U.S. Department of Transportation will be happy if American carriers advertise actual fares on their websites — not $200 to Europe each way, based on a required round-trip purchase, when taxes and surcharges bring the total price to $800. But an attempt by DOT to follow India’s examples would probably lead to a revolution.
Related stories:
Airlines find new way to overcharge fliers
When an airfare sale is not quite a sale
Fare sales often lost in translation
DOT should ban fictitious flights
Continue reading about Is India going too far in curbing airfares?
