=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2003/10= /19/TR185806.DTL ---------------------------------------------------------------------- Sunday, October 19, 2003 (SF Chronicle) Feds threaten airlines over discount fares' hidden fees Micheline Maynard, New York Times Even in an era of bargain air fares, travelers can still get an unpleasa= nt surprise in the form of extra taxes and fees when it comes time to pay for their tickets. Now the Transportation Department is warning airlines not to mask the bottom-line cost of fares, at the risk of facing tens of thousands of dollars in fines from the federal government. Last month the department, in an effort to crack down, once again published its guidelines that govern how the airlines must disclose taxes, fees and other charges, in advertisements and on their Internet sites. The regulations have been on the books since 1984, but in an atmosphere of fare wars, some airlines haven't been adhering to them in the way the government would like, according to airline analysts. Case in point: The Transportation Department fined Air Jamaica $50,000 last month for violating federal regulations that require air carriers to disclose fees separately from the price of air fares. "There were indications from the aviation community that they wanted us = to clarify our policy," said Bill Mosley, a Transportation Department spokesman. The reminder came as fliers noticed yet another cost associated with air travel. On Oct. 1, the government reinstated security fees put in place after the September 2001 attacks but waived during the summer. The fees amount to $2. 50 per flight segment, up to a maximum of $10 a ticket. For the vacation traveler who flies infrequently, that cost might be barely noticeable. But for business travelers the expense adds up. So, too, do the various taxes and other levies on plane tickets. In publishing its policy in the Federal Register last month, the Transportation Department said the airlines had to do a better job of letting customers know what to expect when paying air fares. Specifically, the department expects details of any charges to be, in its words, "easily seen" in air-fare advertisements. The taxes, fees and other costs should be listed "reasonably close" to the price of the fare, and in a type size that can be read without a magnifying glass. In television and radio advertisements, there must be a "similarly prominent notice," and airlines must provide an "explicit statement" adjacent to the price of fares listed on their Web pages. A check of the New York Times travel section showed that many carriers a= re complying. As it promoted fares to Asia that were as low as $309 each way between New York and Tokyo, Northwest Airlines told passengers that they should expect charges on top of those fares, including airport fees of up to $18 a round trip, the security fee of up to $10 a round trip, and immigration fees of up to $75. In addition, military personnel, who are being offered discounted fares = to fly home when they arrive from the Middle East, are being cautioned about what they'll pay on top of the ticket price. Southwest Airlines, which is offering fares of $57 one way from Baltimore to Norfolk, said military personnel should expect to pay a $3 segment fee and passenger facility charges of up to $9 each way, as well as the reinstituted security fee. The Transportation Department's reminder comes amid a flurry of discount offers this fall, which is generally one of the slowest times of the year for leisure travel until things pick up at Thanksgiving. Even though flights were packed this summer, most industry analysts do not expect the pace to continue throughout the autumn. Kevin Mitchell, the chairman of the Business Travel Coalition, a group that represents corporate travel departments and business travelers, said that one reason for posting the low but incomplete fares was the heated competition the traditional airlines are facing from low-fare carriers. "They're eating into market share every day, and the major carriers are using every tactic they can to combat it," Mitchell said. "They can make it look like they have the same $100 fare, even if they have to mask some of the costs to get there," he said. That puts indirect pressure on low-fare carriers to cut fares even lower to beat the major airlines. Not only are the airlines offering cut-rate fares, they have blanketed members of their frequent-flier programs with free-ticket deals. This is another focus of the Transportation Department, which reminded airlines that they must list the conditions and restrictions of free-ticket offers prominently, using an asterisk if needed to draw customers' attention to limitations. The Air Jamaica case seems to be a textbook example of what the departme= nt is trying to protect against. To make its fares look cheaper, officials said, the airline listed its own security and insurance surcharges separate from the ticket price. Airlines are allowed to do this only with government fees; other costs must be folded into the ticket price. The airline also failed to disclose the cost of federal security fees and it did not disclose fees or taxes separately from the price of its fares on its Web site. The Transportation Department said it would cancel half of its fine if Air Jamaica did not commit any further violations over the next year. The airline told the department that it was retraining its marketing staff so that such problems would not recur. Sandrea Falconer, a spokeswoman for Air Jamaica, said: "We would never try to mislead our customers. We just did not follow the rules as strictly as we should have." Mitchell said it was crucial for the government to keep pressuring airlines to disclose passengers' actual costs, especially as competition escalates. "Nobody is going to wring their hands," he said, over paying a couple of dollars more than anticipated on a short flight. But as fees climb into the tens and even hundreds of dollars, as they can on international trips, he said, "it's important for the DOT to stay on top of this."=20 ---------------------------------------------------------------------- Copyright 2003 SF Chronicle