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WASHINGTON (AP) — Five dollars for a pillow, $10 to jump ahead in
the boarding line – all those annoying airline fees can add up. Now
the Department of Transportation is proposing that airlines tell it
– and the public – exactly how much they’re making on those fees.
And, rule proposed Friday by the department would require airlines
to break down those fees by the type of item or service purchased,
from pillows and blankets to entertainment and snacks.
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Making airlines report more information about the amount and types
of fees will make the total cost of flights more clear,
Transportation Secretary Ray LaHood said.
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“In an era of rising fees, passengers deserve better information
about how airlines are performing,” he said in a
statement.
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The proposed rule would also require airlines report more useful
statistics about lost or damaged luggage and mishandled
wheelchairs.
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Airlines received $3.4 billion from baggage fees and $2.3 billion
from reservation change fees in 2010. There is no federal excise
tax on those fees, although they are counted when calculating
income taxes.
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Revenue from seating assignments and on-board sales of food,
drinks, pillows, blankets, and entertainment also isn’t subject to
excise taxes. Until now, airlines haven’t been required to report
revenue from those items separately to the government.
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Taxes on airline tickets go toward subsidizing airports and the
national’s air traffic control system. There has been some
grumbling in Congress that ancillary fees have enabled airlines to
hold down their fares and the taxes they pay to support air
transportation.
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Steve Lott, a spokesman for the Air Transport Association, which
represents major airlines, said the association is reviewing the
proposal.
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“We support transparency, and believe customers should always know
what products and services they are paying for,” Lott
said.
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“We also believe the airline industry, vital to our economy as a
creator of jobs and mover of people and goods, needs to be treated
like other global businesses and free from unnecessary regulatory
burdens that add complexity and cost without delivering value,” he
said.
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Under the proposal, airlines would be required to report 16
additional categories of fees in addition to baggage and
reservation change fees, the department said.
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In April, the department proposed a series of consumer protection
regulations, including a requirement that airlines prominently
disclose all potential fees on their websites. Airlines will also
have to include taxes and government-imposed fees in the fares that
they advertise.
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Airlines have opposed the tax and fee disclosure requirements,
arguing that car dealers and other businesses don’t have to make
similar disclosures.
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The disclosure requirements are due to go into effect next month,
but three domestic airline trade groups have asked the department
to delay the rule for six months so that airlines can train
employees and update computer systems to comply with the
changes.
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Also, low-cost carrier Spirit and regional carrier Allegiant Air
have asked a federal court to block the new disclosure
requirements, as well as several other consumer protections
proposed in April. Southwest Airlines, which carries more
passengers than any other domestic airline, has asked the court to
block the government from requiring airlines to disclose taxes and
government-required fees in their airfares. Southwest, which
doesn’t charge any ancillary fees, said including government
required taxes and fees would force the airline to make complicated
adjustments to its frequent flyer rewards program, which is based
on airfares.
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The proposal announced Friday would also require airlines to report
the total number of bags checked. Airlines already report the
number of mishandled bags relative to the number of passengers
flown. However, more passengers are choosing not to check bags to
avoid fees, decreasing the number of checked bags
overall.
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Reporting all checked bags would allow passengers to compare the
number of lost or damaged bags relative to the number of bags
handled by the airlines, which is a more useful comparison, the
department said.
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In 2010, carriers reported a mishandled baggage rate of 3.57 per
1,000 passengers, an improvement over 2009’s rate of
3.99.
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The department said it is asking airlines to report mishandled
wheelchairs in response to complaints from passengers who say they
are reluctant to travel by air because they fear their wheelchairs
or scooters will be delayed or the equipment may arrive damaged.
The new information will enable passengers to determine which
airlines have better records of handling wheelchairs.
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