New rule will show ‘true cost’ of plane tickets

WASHINGTON (AP) — President Joe Biden on Monday announced a new initiative that would eventually allow consumers to see a more complete price for airline tickets — including baggage and change fees — before making a purchase, while the White House continues to explore opportunities to cut costs for Americans amid persistently high inflation.

The White House says the Department of Transportation’s proposed rule will prevent airlines from hiding the “true cost” of plane tickets, which would help consumers save money upfront and encourage more competition between airlines to offer better fares . The requirement applies not only to airlines directly, but also to third-party search sites like Kayak and Expedia.

“You should know the full cost of your ticket right when you compare it,” Biden said Monday, citing fees charged by airlines to check in luggage or seat families together. The new rule, the president said, will help consumers “select the ticket that’s actually the best deal for you.”

Airlines raked in nearly $5.3 billion in baggage fees and nearly $700 million in cancellation and rebooking fees last year, according to figures from the Department of Transportation. Airlines charge a variety of other fees for extra legroom and other perks that are not tracked by the government.

A trade group of the largest US airlines said airlines are already disclosing the terms and total cost of a ticket. “That includes transparency around taxes and government fees on airline tickets, which account for more than 20% of many domestic one-stop round-trip tickets,” said Katherine Estep, a spokeswoman for Airlines for America.

The proposed rule aims to address a typical situation consumers face when a ticket price is listed on an airline or search website, but information about additional airline charges is often listed elsewhere, such as sitting next to your child or changing a flight or cancel – Fees that vary widely by airline and can quickly add up to hundreds of dollars to the ticket price after the initial purchase. Under the proposal, this information would be made available in advance when the advertised fare is first displayed.

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Fare information would be required for all commercial flights to, within and from the United States.

The proposal dates back to the Obama administration and was scrapped by then-President Donald Trump in 2017 after airlines complained that it was unnecessary and would incur significant costs. It now has to go through a 60-day comment period before final approval.

The proposed rule comes as tensions mount between the Biden administration and airlines, with each blaming each other for a spike in canceled and delayed flights this summer.

The Transportation Department also began releasing information to help consumers learn what each airline is offering when flights are canceled or delayed for reasons within the airline’s control. This prompted several airlines to update policies on finding a new flight and covering hotel and meal expenses for stranded travelers.

More rate hikes are likely on the way as the Federal Reserve fights inflation. (Source: CNN/Pool)

Biden made the announcement Monday afternoon at a meeting of the White House Competitiveness Council, set up last year as a way for his administration to find cost-saving measures for consumers. It was the group’s third meeting, chaired by National Economic Council Director Brian Deese.

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“Capitalism without competition is not capitalism,” Biden said at the event, held in the State Dining Room of the White House. “This is exploitation.”

At the meeting, Biden also urged other federal agencies to take similar cost-saving measures, particularly through more transparency on hidden fees that can inflate the true cost of goods and services.

One example is a proposal by the Federal Communications Commission that would require internet service providers to better disclose fees and charges on what the administration calls “broadband nutritional labeling.” And the Ministry of Agriculture will also unveil new measures on Monday aimed at boosting competition in various agricultural markets.

The government has taken similar action when it comes to bank and credit card fees, which the White House says have saved consumers $3 billion annually compared to before the COVID-19 pandemic.

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Koenig reported from Dallas. Associated Press writer Hope Yen contributed to this report.