Vote would let airline ads omit taxes from prices

WASHINGTON – A House panel approved legislation Wednesday to allow airlines to advertise ticket prices without including federal taxes.

The legislation approved by voice vote by the Transportation and Infrastructure Committee seeks to overturn a contentious Transportation Department rule requiring airlines to include all taxes in the first and largest appearance of their prices in advertising or on their websites.

The bill must still be considered by the full House and the Senate, where its prospects are unclear.

The committee chairman, Rep. Bill Shuster, R-Pa., said airlines are at a disadvantage in being forced to include taxes in their pricing, which effectively hides taxes from travelers. Other products from groceries to electronics add taxes at the checkout.

"This effectively masks the government-imposed taxes and fees on consumers," Shuster said. "It is only fair that consumers know what they are paying for."

But consumer groups contend that airline pricing is complicated enough and airlines should have to disclose the full price of a ticket.

"This proposed bill takes out truth in advertising and allows airlines free rein to create confusion in advertising," said Charlie Leocha, director of the Consumer Travel Alliance, a group that lobbies Congress on consumer issues. "Why can't the aviation industry simply tell the truth about their pricing instead of playing games?"

The Business Travel Coalition, an industry group of business-travel managers, warned that the most pernicious consequences of the legislation would come in Internet advertising that would promote lower airfares and only acknowledge taxes later.

"This represents an open invitation for deceptive marketing practices," the coalition said.

The rule was finalized after years of debate in April 2011 and went into effect in January 2012.

Airlines led by Spirit Airlines challenged the rule all the way to the Supreme Court, saying it violated their right to free speech. But the cour! t refused in April 2013 to hear the case.

Airlines have campaigned for years to lower federal taxes. Airlines for America, the industry group representing the largest carriers, counted 17 taxes and fees that raised $19 billion last year. Taxes represent about 20% of an average $300 ticket, according to the group.

"We need government to stop looking at us as a cash cow and look at us as an economic engine," Nicholas Calio, CEO of Airlines for America, told the U.S. Chamber of Commerce aviation summit last week.