240 It's called "truth in advertising"

U.S. Orders Airlines to State Fees More Clearly

By SUSAN STELLIN

The government plans to announce a new set of passenger protections on Wednesday aimed primarily at travelers’ growing frustration over airline fees.

Although the rules do not set limits on how much carriers can charge for items like bags, ticket changes and seats, they do require airlines to more clearly disclose these and other fees in advertisements and on their Web sites. Ads will have to cite the full price, including government taxes that now are often relegated to the fine print.

Other provisions increase the compensation carriers must pay passengers who are involuntarily bumped from flights (from up to $800 to as much as $1,300 for the longest delays). They also require the airlines to refund checked baggage fees if luggage is lost, and require airlines to promptly notify customers of delays over 30 minutes. The provisions impose a four-hour limit on time spent on the tarmac for delayed international flights, expanding a policy that has been in place for domestic flights for a year.

The Department of Transportation proposed these and other passenger protections last June, soliciting public comment on the ideas, and ultimately adopted most of the rules under consideration, despite objections raised by the airlines.

“Airline passengers have a right to be treated fairly,” Ray LaHood, the transportation secretary, said in a statement Tuesday. “It’s just common sense that if an airline loses your bag or you get bumped from a flight because it was oversold, you should be reimbursed. The additional passenger protections we’re announcing today will help make sure air travelers are treated with the respect they deserve.”

The government is trying to deal with a growing frustration for travelers: confusing ticket prices and hidden fees.

When the new rules take effect in late August, airlines will have to prominently disclose all potential fees on their Web sites, including surcharges for baggage, meals, canceling or changing reservations and seat assignments. Although the overview of the new rules provided by the Transportation Department did not specify how these fees would have to be displayed during online fare searches or purchases, the government did single out baggage fees — which have become increasingly complicated — for special attention.

The new rules require the airlines and ticket agents to refer passengers to up-to-date information about baggage charges, both before and after a ticket purchase. Airlines must also include bag fees in e-ticket confirmations sent to passengers.

Another new rule that is sure to spur debate requires airlines and ticket agents to include all government taxes and fees in every advertised price. That would change the longstanding practice of allowing advertisements to list government taxes and fees separately — usually as part of a lengthy, small-print disclaimer.

The Transportation Department also noted that it planned to issue a proposal later this year that would require extra fees to be displayed at all points of sale, not just on airline Web sites. That is another hot issue, as travel agencies have been asking the government to force airlines to share fee data with databases that make it easier for customers to compare ticket prices.

Since the Transportation Department released a preview of the new rules on the condition that the details not be shared until Wednesday, the airlines’ reaction to the policies could only be gleaned from responses they and their trade associations filed during the public comment period last year.

The Air Transport Association, the airlines’ trade group, objected, for instance, to the full-fare advertising requirement, calling the proposal “likely illegal” and pointing out that other businesses like hotels or telecommunications companies were not forced to include government taxes in their advertised prices.

“Given the wide and varied practice of unbundling services and advertising such services, it is not clear why the aviation industry should be treated differently,” the Air Transport Association wrote.

More pithily, Spirit Airlines said in its filing that forcing carriers to advertise prices including additional fees “would be akin to McDonald’s being required to only advertise burgers including the price of fries and a Coke.”

The Air Transport Association also objected to a rule, which was ultimately adopted, that will require airlines to hold a reservation at the quoted fare without payment, or offer cancellations without penalty, for at least 24 hours after a reservation is made.

Spirit Airlines wrote that this proposal would be “like allowing a customer at a grocery store to take home a carton of milk without charge, leave it out in the sun and then bring back the spoiled milk the next day.”

In a concession to the airlines’ objections, the government did limit the 24-hour rule to reservations made one week or more previous to a flight’s departure date. The Transportation Department also decided not to force airlines to incorporate their customer service plans into their contracts of carriage, which would have given passengers grounds for legal action if carriers violated their service commitments. The department also did not require baggage fee refunds when luggage is merely delayed.

Although the Air Transport Association opposed extending tarmac delay limits to international flights, the government adopted this rule, which will apply to domestic and foreign carriers. The Transportation Department cited the extended tarmac delays passengers experienced on foreign carriers during a snowstorm last December at Kennedy International Airport in New York as an “important factor” in its decision.

The airlines have warned that this rule will probably increase flight cancellations. That issue is currently in dispute as analysts, airline representatives and government officials debate whether the threat of hefty penalties for tarmac delays for domestic flights has resulted in more cancellations in the last year.