Senator Webb introduced the Airline Baggage Transparency and Accountability Act in response to passengers' concerns about unfair airline practices regarding hidden fees and mishandled baggage. In 2008 and 2009, airlines reported approximately $7.9 billion in revenues from baggage fees and reservation change and cancellation fees--the two largest sources of fee revenues.
"In recent years, airlines have been adding various fees to the total ticket prices, often without fully disclosing these additional costs to customers," said Senator Webb. "In addition, airlines have exploited a tax loophole which enables them to avoid paying taxes on these fees. This not only adds confusion to purchasing tickets, but also reduces funding for our nation's vital air traffic control system."
Senator Webb's legislation would:
* Increase transparency of hidden fees for airline ticket sales;
* Eliminate a tax loophole that incentivizes airlines to charge carry-on and checked baggage fees. The fees would instead be treated as "paid for taxable transportation";
* Authorize the Department of Transportation's Aviation Consumer Protection Division to oversee lost and stolen baggage claims; and
* Require data collection and the public release of collected data concerning airline handling of lost, damaged and stolen baggage.
"Senator Webb has captured the flying public's frustration by creating a bill that would ensure transparency for unbundled fees and require the DOT to report the whole story to consumers regarding lost, damaged and stolen baggage," Kate Hanni, Executive Director of FlyersRights.org, America's largest non-profit airline consumer organization.
According to the U.S. Government Accountability Office, many airlines introduced fees in 2008 for a variety of passenger services, most notably for a first or second checked bag, for which separate charges did not previously exist. The revenues from baggage and many other fees are not subject to the 7.5 percent excise tax on amounts paid for domestic air transportation, which is used to help fund the nation's air traffic control system and oversight of aviation safety. An estimated $186 million in revenues were lost in FY2009 alone because of the exemption of checked baggage fees to this tax.
The GAO found that information about airline fees is not fully disclosed through all ticket distribution channels used by consumers, making it difficult for them to compare the total cost of flights offered by different carriers. The Department of Transportation (DOT) does not currently require disclosure of airline-imposed optional fees, apart from those for checked bags, but recently issued a Notice of Proposed Rulemaking (NPRM) considering different forms of disclosure of such fees.
The text of the legislation is below:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the "Airline Baggage Transparency and Accountability Act".
SEC. 2. NOTIFICATION REQUIREMENTS WITH RESPECT TO THE SALE OF AIRLINE TICKETS.
(a) In General.--The Office of Aviation Consumer Protection and Enforcement of the Department of Transportation shall establish rules to ensure that all consumers are able to easily and fairly compare airfares and other costs applicable to tickets for air transportation, including all taxes and fees.
(b) Notice of Taxes and Fees Applicable to Tickets for Air Transportation.--Section 41712 of title 49, United States Code, is amended by adding at the end the following:
"(c) Notice of Taxes and Fees Applicable to Tickets for Air Transportation.--
1. In general.--It shall be an unfair or deceptive practice under subsection (a) for an air carrier, foreign air carrier, or ticket agent to sell a ticket for air transportation unless the air carrier, foreign air carrier, or ticket agent, as the case may be--
1. "(A) displays information with respect to the taxes and fees described in paragraph (2), including the amount and a description of each such tax or fee, simultaneously with and in reasonable proximity to the price listed for the ticket; and
2. "(B) in the case of a ticket for air transportation sold on the Internet, provides to the purchaser of the ticket information with respect to the taxes and fees described in paragraph (2), including the amount and a description of each such tax or fee, before requiring the purchaser to provide any personal information, including the name, address, phone number, e-mail address, or credit card information of the purchaser.
"(2) Taxes and fees described.--The taxes and fees described in this paragraph are all taxes, fees, and charges applicable to a ticket for air transportation, including--
"(A) all taxes, fees, charges, and surcharges included in the price paid by a purchaser for the ticket, including fuel surcharges and surcharges relating to peak or holiday travel; and
"(B) any fees for checked baggage, seating assignments, and optional in-flight goods and services, and other fees that may be charged after the ticket is purchased.".
(c) Rulemaking.--The Secretary of Transportation, in consultation with the Administrator of the Federal Aviation Administration, shall prescribe such regulations as may be necessary to carry out section 41712(c) of title 49, United States Code, as added by subsection (b).
SEC. 3. FEES FOR CARRY-ON AND CHECKED BAGGAGE TREATED AS PAID FOR TAXABLE TRANSPORTATION.
(a) In General.--Section 4261(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
"(6) Amounts paid for carry-on or checked baggage.--Any amount paid by an airline passenger to check baggage for transit on the aircraft carrying such passenger or to personally carry baggage into the cabin or overhead storage compartments of the aircraft carrying such passenger shall be treated for purposes of subsection (a) as an amount paid for taxable transportation.".
(b) Effective Date.--The amendment may by this section shall apply to transportation beginning on or after the date of the enactment of this Act.
SEC. 4. AUTHORITY OF AVIATION CONSUMER PROTECTION DIVISION WITH RESPECT TO CLAIMS RELATING TO LOST AND STOLEN BAGGAGE.
(a) In General.--The Assistant General Counsel for Aviation Enforcement and Proceedings shall, acting through the Aviation Consumer Protection Division, have authority to carry out consumer protection compliance and enforcement activities relating to claims by passengers with respect to lost, stolen, and damaged baggage.
(b) Responsibility of Division.--The Aviation Consumer Protection Division shall also have authority to do the following:
(1) Information collection.--Collect information from each air carrier operating under part 121 of title 14, Code of Federal Regulations, with respect to the air carrier's procedures and performance relating to lost, stolen, and damaged baggage.
(2) Publication of information.--Make the information collected pursuant to paragraph (1) available to the public on the Department of Transportation website.