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Bill would upend new airline fare advertising rule

By the CNN Wire Staff
updated 7:06 PM EST, Mon January 30, 2012
STORY HIGHLIGHTS
  • As of last week, airlines must highlight total fare, including fees and taxes
  • The breakdown of fees and taxes can be shown elsewhere in an ad or online
  • Georgia congressman says he'll file a bill to cancel the DOT rule

Washington (CNN) -- A new rule requiring airlines to include government taxes and fees in their advertised price is continuing to cause turbulence in the travel industry -- and a congressman said Monday he'll introduce a bill to overturn it.

Rep. Tom Graves, R-Georgia, said Monday he will introduce a bill to cancel the U.S. Department of Transportation rule, which took effect last week. The rule requires airlines to roll mandatory per-passenger taxes and fees into the advertised fare, but allows them to break down the costs elsewhere in the advertisement.

Before the rule, airlines frequently advertised low base fares on online sites and added taxes and fees later in the shopping process.

The DOT and some consumer advocates argued the airlines were hiding the true cost of air travel. But Graves and some airlines said the new rule allows the government to hide government taxes and fees.

"If the American people can't see these costs clearly, I fear it will be easier (for) these fees and taxes to be raised without their knowledge," Graves said in a statement.

"If the goal of the DOT's rule is to prevent companies from deceiving passengers about the total cost of their ticket, why is the department mandating that airlines hide the taxes, surcharges and government fees in the fine print?" Graves said. "Transparency and honesty in ticket pricing should apply across the board."

The clash between the DOT, the airlines, consumer groups and others has been loud and brash.

Spirit Airlines has configured its website with a big "Warning!" pop-up sign. The message: "New government regulations require us to HIDE taxes in your fares. This is not consumer friendly or in your best interest. It's wrong and you shouldn't stand for it."

The DOT's top lawyer responded with a letter calling the ad campaign "misguided and disingenuous."

"Contrary to its direct assertion that the rule requires airlines to hide the amount of government taxes and fees, the rule does not prevent carriers from disclosing the amount, type, and nature of government taxes and fees that are associated with air travel," DOT General Counsel Robert Rivkin wrote. "Carriers are free to describe the components of the full price, including government taxes, so long as the description is not deceptive," he wrote.

The move to introduce legislation was commended by Airlines for America, the trade organization that represents the major U.S. airlines.

"We support this effort to require DOT to return to its previous regulation, which does not artificially distort the base price of an airline ticket, and ensures that customers always know exactly how much they are paying in federal aviation taxes and fees before they decide to purchase," said Steve Lott, vice president of communications for Airlines for America said in an e-mail. "Federal taxes and fees now constitute $61, or over 20%, of the cost of a typical $300 domestic round-trip ticket, putting aviation at a higher tax rate than alcohol, beer, cigarettes and firearms."

CNN's Marnie Hunter contributed to this report.

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