Op-Ed: DOT Should Keep the Full Price of Air Travel in Full View

DALLAS — The current administration is proposing, yet again, to roll back regulatory protections under the guise of “enhancing consumer choice.” Reading that phrase immediately induces another form of rolling back: that of my eyes into the back of my skull.

The U.S. Department of Transportation’s (DOT) proposed rule aims to reduce current restrictions on airfare advertising. DOT describes the change as providing greater flexibility for airlines and ticket agents. Among its stated goals is to allow sellers to draw more attention to taxes, fees, and other components of a fare, including government-imposed costs.

The wording matters here. Under the rule DOT formally proposed on July 1, airlines would still have to show the full price upfront. The change would allow individual fare components to appear with the same prominence as the total, though not more prominently. DOT also wants to rescind nine airfare-advertising guidance documents.

That is narrower than allowing an airline to advertise only a base fare and reveal the rest later. However, the same notice asks whether DOT should go further and repeal the Full Fare Rule in whole or in part. The Department did not propose specific regulatory text for a full repeal, yet placing that option in the notice raises the stakes beyond a dispute over font size. The public-comment period runs through August 21.

Both ideas presented by the DOT require scrutiny. A full repeal presents the greater danger, but even the narrower proposal chips away at the most useful piece of information in airfare shopping: the amount a passenger must pay. In doing so, DOT risks weakening the two mechanisms consumers need to navigate any market effectively: useful information and reliable price discovery.

Widening the Information Chasm

Shopping for airfare is already a complicated affair. A passenger may compare departure times, connections, airport changes, refundability, baggage policies, seat restrictions, loyalty benefits, and other conditions prior to making a purchase. The one figure that should not require interpretation is the total price of the itinerary.

That is what the Full Fare Rule provides to consumers. Since 2012, the rule’s basic principle has been that when an airline or ticket agent advertises a fare, the price shown must include government taxes, fees, and carrier-imposed charges that the customer must pay in full. 

The rule does not prevent itemization. Airlines may identify charges separately or disclose them through links and pop-ups. The current rule protects the visual representation and hierarchy of information: the total price must lead, while its components remain subordinate.

That hierarchy is not merely for the sake of aesthetics. The all-in fare is the only price measure that remains comparable across sellers and itineraries. A base fare indicates what the airline chose to place in a single accounting bucket. The total tells the passenger what will leave their bank account. Once sellers can train a shopper's attention on different components, price comparisons begin to turn from apples to apples into apples to oranges.

DOT argues that equal prominence would advance airlines' First Amendment interest in drawing attention to government-imposed taxes and fees. The Department also says court decisions issued since 2012 have created new constitutional concerns about restrictions on font size and prominence. I find the suggestion that this change advances free speech galling when its practical effect may be to make the price signal less useful to the buyer.

I am not suggesting that the asserted legal arguments be dismissed with an eye roll. They should be tested on their merits. However, as a matter of policy, an airline's interest in explaining the composition of a fare does not require government action. The current rule permits a breakdown; it simply makes the payable price the dominant signal.

In 2012, the U.S. Court of Appeals for the D.C. Circuit upheld the Full Fare Rule against an airline’s First Amendment challenge. The court concluded that the disclosure requirement addressed potential deception regarding the final ticket price and did not preclude airlines from providing itemized information. DOT may believe more recent case law changes that analysis. The Department may assess those constitutional concerns, but courts ultimately decide whether a regulation violates the Constitution.

Partitioned Pricing Is Not Neutral

Economists refer to the division of a price into a base amount and mandatory surcharges as “partitioned pricing.” The presentation can affect how consumers remember and evaluate the price even when the arithmetic is straightforward.

A 2018 meta-analysis of 27 partitioned-pricing studies found that consumer responses vary with the way prices are presented, the size and type of the surcharge, and the product involved. It also found that partitioned pricing is more likely to produce a favorable consumer response when the total price is absent.

That distinction is important because DOT's formal proposal does not remove the total. It is not, by itself, drip pricing, and it would not necessarily force passengers to click through several pages to discover the mandatory cost.

But keeping the total somewhere on the screen does not make every presentation equally clear. If a base fare, a government-charge figure, and the all-in total compete for attention at the same size and weight, the seller has more room to influence which number becomes the passenger's mental reference point. According to economists, consumers, to varying degrees, suffer under “bounded rationality,” which is to say that none of us has limitless time, attention, or cognitive bandwidth. Partitioned pricing can take advantage of the related anchoring effect, in which the first or most salient figure becomes the reference point against which the rest of the transaction is judged. The customer receives more figures, but not necessarily more useful information.

A passenger may reasonably want to know how much of a ticket goes to the airline and how much goes to taxes or airport charges. That information should remain available. It should not, however, compete with the one number required to complete the purchase.

Full Repeal Would Raise the Stakes

The repeal alternative is more troubling because it would remove DOT's explicit nationwide rule that the advertised fare be the entire price paid to the carrier or ticket agent. DOT points to provisions of the Internal Revenue Code and its authority to pursue unfair or deceptive practices on a case-by-case basis. Neither is as clear for consumers or sellers as a single aviation rule requiring an all-in fare at the start.

If a future regime allowed any mandatory part of the price to be revealed later in the booking process, the harm would go beyond mere annoyance. Passengers comparing several flights would have to spend more time discovering which advertised prices are genuinely comparable. A traveler could choose Airline A over Airline B based on what appears to be a lower fare, only to learn after investing time in the booking that Airline A actually costs more. Restarting the search creates enough friction that many travelers will accept the higher price—a mistake that rewards strategic price presentation rather than better value.

That additional effort imposes real costs on consumers and the market at large. Time is our scarcest resource. A Federal Trade Commission analysis of mandatory hotel resort fees found that separating such fees from the room rate, without first showing the total price, was likely to increase the search and cognitive costs of finding accommodations. Hotels are not airlines, and that study does not prove that DOT's narrower prominence proposal will produce the same outcome. It does demonstrate why delaying a mandatory total can make comparison shopping less efficient and create waste for consumers and the economy at large.

The burden would fall most heavily on people with the least time, patience, or ability to repeat a long search. That is not a defect in consumers. Human attention is finite, and sellers design purchasing systems with that in mind.

Competition should reward the carrier offering the best combination of schedule, service, and total price. It should not reward the carrier most skilled at making one part of the price memorable while making the payable amount easier to overlook.

Deregulation Should Improve Competition

I am not generally opposed to deregulation. But good deregulation must advance the two pillars of a free-market economy: competition and innovation. It can remove artificial barriers to entry, reduce rules that no longer serve their purpose, and give firms room to compete by offering better products and lowering costs.

Weakening a common price standard accomplishes neither. It changes how the same cost is framed, not the value proposition offered to the passenger. Deregulation should not give firms a stronger incentive to improve how a price is presented than to improve the product behind it.

DOT should retain the requirement that the total mandatory fare be displayed upfront and more prominently than its components. It should review the nine guidance documents individually, preserving any that still clarify seller obligations or prevent misleading descriptions. Airlines should remain free to itemize government taxes, carrier charges, and other components immediately below the all-in fare, using accurate labels and per-passenger amounts.

That approach protects both types of information: what makes up the price and what the passenger must actually pay.

A free market does not become freer when every seller can highlight a different part of the bill. It works when buyers can compare offers quickly and accurately, then reward the competitor that offers the best value. In athletics, we would not call a contest fair if the referees were blindfolded. Neither should we call airfare competition healthy when the clearest price signal is obscured.

Obscuring the total cost of airfare does not give consumers flexibility. It weakens their ability to function in the free market. Consumer choice begins with a clear answer to a simple question: What will this flight cost me?