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House bill would allow airlines to exclude taxes from fare ads

American Airlines plane and terminal
Mark Elias | Bloomberg | Getty Images

Airlines would no longer have to include taxes when initially advertising their fares, under House legislation a committee will vote on Tuesday.

The provision, the source of a long-running conflict between consumer advocates and airlines, is part of Federal Aviation Administration legislation at the Transportation and Infrastructure Committee. The House has approved similar measures in the past, but the Senate hasn't acted on them.

The legislation would overturn a Transportation Department requirement that airlines include all taxes in the first mention of fares in their advertising. The department's goal was to prevent bait-and-switch ads featuring low fares that then grew with taxes.

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The rule approved under the department's authority to regulate unfair and deceptive practices went into effect in January 2012.

But airlines have long fought the requirement, arguing that no other industry has to include taxes when advertising prices for their products. Taxes add about 20% to the cost of an average ticket, according to the trade group Airlines for America.

Carriers led by Spirit Airlines fought the provision all the way to the Supreme Court, which declined to hear the case in April 2013.

The bill from Rep. Bill Shuster, R-Pa., states that it is not an unfair or deceptive for airlines to advertise their base fares so long as they clearly disclose taxes through a link or pop-up box on their web sites.

Travel agents have opposed similar legislation in the past out of concern it would be harder to compare prices. Charlie Leocha, president of the advocacy group Travelers United, called the provision a "poison pill" for travelers.

"Back in 2012, before DOT set rules to control deceptive advertising, airlines advertised transatlantic flights for $65. Of course, after reading the fine print a consumer found that the most inexpensive ticket cost more than $750," Leocha said. "The FAA bill will allow airlines to return to that kind of anti-consumer misleading advertising."