and I say “D’uh”. 

The GAO report on airline fees is, frankly, more concerned with lost tax revenue because of de-bundling of “services”.  Baggage fees as well as other fees aren’t subject to the excise tax that are paid on the fare price of the tickets.  I’m wholly unsurprised that this hole is being revealed and talked about and I do expect that we’ll see that situation “fixed” some time in the future although I would point out that the airline indudstry is already highly taxed and the decrease in revenue over the past 2 years likely has to do with depressed traffic levels far more than lost revenue on de-bundling.

However, it makes both a good and official observation that the systems for purchasing a ticket at this point are in disarray.  An area that I’ve already addressed once this week prior to the release of the GAO report.  I’ve wondered whether or not the systems currently in place are legal.  I suspect they are legal but I also suspect that they dance awfully close to the line when it comes to fair trade practices.

Regardless, this is an area where some regulation is appropriate.  Customers are at a great disadvantage because of they cannot identify *all* the fees they are potentially subject to when arranging for their trip.  Baggage fees are, in some cases, not revealed until after a purchase.  If they are revealed prior to the purchase, they’re revealed just before consummating the transaction and long after price comparisons have taken place for a trip. 

But it’s not just baggage fees.  It’s fees for assigning seats, for getting good seats, for making a reservation via phone vs the internet and many others.  Some regulation that enforces transparency for pricing and which allows the consumer to make a reasonable comparison in prices is appropriate in this case.  No, airlines don’t want that transparency because they know that if they can get you to the moment of truth, getting your credit card out for the purchase, they are almost certainly assured of the sale. 

But our government isn’t here to serve airlines purposes solely.  By all means, allow them to compete on price and I’m willing to concede the point on baggage fees at this point (which doesn’t mean I like 1st bag checked fees one bit at all).  However, enforce transparency so that the consumer can make an informed purchase. 

We require this when it comes to purchasing an automobile or an appliance or most anything else.  Why shouldn’t it be required for purchasing transportation?

Filed under: Airline News by ajax