Back in May the Department of Transportation filed a “notice of proposed rulemaking” laying out the direction they intended to take with new rules for how airfares are displayed… everywhere.
As airlines have added on lots of fees, and new websites have popped up that search for travel, the Department of Transportation has been considering whether to regulate the way that fees show up (at the front of the booking process next to ticket prices, or just shown on an airline website?) and whether consumers have to be informed about the way websites sort the options that are displayed and whether or not all possible airline options are displayed.
More disclosure is usually considered a good thing, but telling every consumer the same information that may or may not be relevant to them on every single trip might not be — and there may be better ways to give consumers customized information that this sort of regulation can short-circuit.
There’s a lot in the DOT’s proposed rules, but the meat of it is how ancillary fees – like baggage, assigned seats, and priority boarding – have to be displayed.
I filed a regulatory comment with the Department of Transportation, along with a co-author, Dr. Patrick McLaughlin, who is a former senior economist for a division of the DOT.
I didn’t address the mistake fare issue that they raised. And I didn’t try to get involved in the thicket of how airline fee data is provided to online travel agencies and through computer reservation systems generally. These commercial disputes are shaking themselves out, there are complicated issues involved, though of course if the DOT is going to mandate everyone display fees alongside tickets prices early in the booking process then they are going to have to require that those fees be easily accessed.
Instead, I offered that while the idea of transparency — more information, sooner, everywhere — is a compelling principle, requiring all consumers to wade through specific government-defined information before booking a ticket is a bad idea. And every piece of information doesn’t have to be on every website, since consumers don’t generally just go to one place when booking. Research suggests that on average consumers consult many sites when they book.
Rather than making every airline site show the same fees, note when they do not offer schedules for every airline (free advertising for Southwest!), and prohibit exercising judgment in how schedules are displayed without clear warnings (like recommending which flights might be ‘best’ for you, without disclosing its formulas), they ought to focus on things that are more useful.
The rule does also include things like requiring disclosure of on-time performance by more airlines, like regional carriers. It won’t make a difference in their performance, as the DOT hopes, but there’s little wrong with the idea.
But the DOT shouldn’t require one set of fees that every traveler has to be presented with. They wind up picking the wrong information.
What’s far better is the customization that websites are working towards, to actually guide travelers and help them pick the flights that are best for them and understand costs.
We lost something in travel when it all went online. Some customers do need handholding, the kind they used to get from travel agents of varying quality.
- What connection is best?
- Is there enough connecting time?
- What seat should I choose?
When airfare went online, travel became a truly mass experience. The current wave of online travel is customization – figuring out the relevant fees, amenities, and making recommendations to travelers rather than just displaying prices and schedules. That’s a process that should be allowed to continue.
My contention is that the DOT isn’t necessarily picking the right fees for everyone that will be relevant every trip into the future, and it’s better to allow customization of information. And it’s better to allow customized sorting of information based on what a new site believes will be best for travelers – based on a “pain index” or recommended connections in the winter, or what have you. Prohibiting ‘undisclosed bias’ gets in the way of improving travel.
People hate airlines so it’s great fodder to beat up on them. And transparency is always popular. But it doesn’t make sense to say that customers don’t know checked bags have fees – it’s precisely that they do know which is why checked bag fees are so unpopular.
Fees are pretty well disclosed now, as they’re required to be. Taking it a step further, to require specific fees be shown on every single website that displays schedules and fares – at the start of every search process – is going to be cumbersome. We want nimble. Travel searches should get better, not frozen in time by regulatory requirements.
And though it’s not popular to say, we don’t actually all want more information. Priceline and Hotwire offer us discounts precisely by giving us less information in advance about our travels.
Consumers go to many websites in their searching. They don’t need every site to be one-stop shopping, as the rule would move us towards. I’d rather see a ton of new sites like Hopper.com that introduced an interactive tool in August that lets consumers pick the fees and services most relevant to them.
Of course, you should read the full comment!