January 24 2012

New Airline Fee Rules Enable Government to Quietly Increase Taxes on Air Travel

Libby Jacobson

In Government-speak, “transparency” roughly translates to “secrecy,” according to one US airline. Spirit Airlines blasted an email out to its customers today warning them that the Department of Transportation’s new airfare rules – ostensibly a consumer-friendly measure to make airfare prices clearer– will in fact make it much easier for the government to raise airfare taxes on the sly, without having to face public scrutiny. From Spirit’s press release:

Thanks to the U.S. Department of Transportation's latest fare rules, Spirit must now HIDE the government's taxes and fees in your fares.

 If the government can hide taxes in your airfares, then they can carry out their hidden agenda and quietly increase their taxes. (Yes, such talks are already underway.)

Spirit DOES NOT support this new USDOT mandate. We believe the better form of transparency is to break out costs so customers know exactly what they're buying.

My question is how the DOT imagined it would be able to pass this off as a consumer-friendly effort. They say the rules will help customers determine the full price of airfare before the pay, but many airfare search engines like Kayak already include taxes in their quoted prices. Furthermore, is there anyone in the country who’s still surprised by the existence of taxes or fees? Grocers and clothing stores don’t automatically mark-up their taxable products to include sales tax, which is typically listed as a separate total on your receipt. When you receive your cell phone or utility bill every month, state and local taxes are itemized. But in the case of air travel, the federal government apparently thinks its citizens are not bright enough to figure out that this same concept applies to plane tickets as well.

Most importantly, rules like these that destroy transparency allow both the government and the airline to increase their taxes/prices, while providing a convenient scapegoat. “It’s not our fault your prices went up, the other guys are to blame!” Kudos to Spirit for raising consumer awareness of this madness.

Tip of the hat to J.P. Freire, who’s previously written on the disconcertingly cozy relationship between bureaucrats and airlines.

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