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Understanding airfares no longer up in the air

By Jim Barnett, CNN
updated 3:20 PM EST, Wed January 18, 2012
STORY HIGHLIGHTS
  • New regulations will require disclosure of airfare taxes and fees up front
  • Passengers also will have 24 hours to cancel most reservations without penalty
  • "Now everything has to be disclosed," Transportation Secretary Ray LaHood says

Washington (CNN) -- For those who like to fly but hate the hassle of hidden airfare fees, there is hope on the horizon. Starting next week, the only surprise they should experience is that there are fewer surprises.

A Department of Transportation policy will go into effect to protect passengers who buy tickets and then feel a jolt when the airlines tack on taxes and fees.

"What we are trying to do is to make sure when people go online and they look at what it costs for a ticket to fly, that they see all of the different charges and fees that they are going to be paying," Secretary of Transportation Ray LaHood told CNN on Wednesday.

"That has not been the case in the past. Sometimes people might show up at the airport and find out they are being charged for things that they had no idea were a part of their charges." he said. "What we are really saying to the flying public is, you need to be treated with respect, you need to be treated with the idea that you pay a lot of money to fly, and you ought to know."

One of the protections says that airlines must include all mandatory per-passenger taxes and fees in advertised fares. Baggage fees and other optional charges will not be rolled into advertised prices but will be more clearly disclosed so that passengers can compare prices across airlines.

Among the other protections:

-- A ban on price increases after a ticket has been purchased.

-- A 24-hour window for passengers to hold or cancel a reservation without payment or penalty for reservations made a week or more before the departure date.

-- Required disclosure of baggage fees upon booking and on e-ticket confirmations

-- Required prompt notification of delays of more than 30 minutes, cancellations and diversions

-- Application of the same baggage allowance and fees throughout a passenger's trip

-- Required disclosure of all optional fees through a prominent link on an airline's homepage

"Now everything has to be disclosed," LaHood said. "If you want a pillow, if you want a cup of coffee and the airline wants to charge you for that, they have to disclose that. If they are going to charge you for a bag, they have to disclose that. If they lose your bag, they have to reimburse you for the charges they charged you. That was not the case in the past."

LaHood pointed out that more people make their reservations by visiting various non-airline websites because the tickets can be cheaper. He says the new requirement will ensure passengers will know the bottom line whether they go on the Internet or through a travel agent or third party.

Janet Libert, editor of Executive Travel Magazine, applauds the change.

"Passengers will see prices go up, but it is not really an airfare increase. It is the inclusion of the fees and taxes ... that must be included in all conversations that airlines have with passengers," Libert said.

Airlines have until now been allowed to separate mandatory government taxes and fees, which can add more than 20% to the price of air travel, from the initial advertised price of a ticket.

"We are going to make sure people have as much information as possible, and that they know what all the fees are. This is what we owe to the flying public for the cost that they pay to fly around the country and around the world," LaHood said.

Some airlines oppose some of the new protections.

"Forcing airlines to include taxes will also make air travel 'look' more expensive when in reality it's not," Southwest Airlines spokeswoman Brandy King said via e-mail last month about the move to roll mandatory taxes and fees into advertised fares.

"Our main objection ... is that there is no justification for treating air travel differently from just about everything else that consumers purchase, i.e. they pay for the price of goods and services and then pay tax," King said. "And that's how everything is advertised, as the price of the item separately from the tax on that price."

CNN's Marnie Hunter and Christopher Dawson contributed to this report.

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