Guest comment: Airline ticket pricing and the dreaded asterisk By Peter Greenberg

By Peter Greenberg ( http://www.petergreenberg.com/ ) An Emmy award-winning writer and producer, Peter Greenberg is the Travel Editor for NBC’s Today show, CNBC and MSNBC, a best-selling author and host of the nationally syndicated Peter Greenberg Worldwide Radio show. Greenberg is contributing editor to Men’s Health and Forbes, and was also Contributing Editor for America Online (AOL), a contributor to The New Yorker magazine and a frequent guest on ABC’s Oprah Winfrey Show and The View.

Failure to Disclose

One of these days, someone has to explain to me the logic and upside of deception, especially when the person being deceived can figure out the attempt almost instantaneously.

And it all starts with airline ticket pricing and the dreaded asterisk.

A few years ago, I was discussion misleading pricing with Richard Anderson, then CEO of Northwest Airlines. “Will there ever be a time—in my lifetime,” I asked him, “when I would ever see one of your advertisements that didn’t contain an asterisk?”

He paused for a moment, and then replied, “Probably not.” Sadly, I think it was an honest response.

“But why,” I continued “do you insist on advertising a Los Angeles to Minneapolis fare of $178, and then four inches down on the same page do you then reveal it is a one-way fare requiring a round-trip purchase? First you get our attention, and then moments later you anger us.”

“Well,” he answered, “my marketing people tell me it gives us an edge.”

“No,” I argued, “your marketing people are pushing you over the ledge.”

After all, how stupid do the airlines think we are? (Careful … I’m not going to answer that …)

In all seriousness, failure to disclose, and the draconian asterisk are now commonplace in travel pricing.

As one of my colleagues recently described it: Come fly the friendly lies.

And, it’s about to get even worse. In addition to the “one-way” pricing come-on, a number of airlines – including Northwest – are lobbying the government to relax even more pricing restrictions that will make it even harder for consumers to determine the true cost of a ticket.

The airlines have asked the U.S. Department of Transportation to essentially make its advertising rules worthless – to remove the requirement for airlines to quote the full fare for a trip. Specifically, the airlines are asking for permission to split out and bury certain costs – like fuel surcharges – and in the process they could effectively end comparison shopping for airfares.

As many of you know, under current regulations, airlines are allowed to separate out certain government imposed fees (taxes, surcharges, security costs) from their advertised price quotes, as long as those fees are shown elsewhere in the advertisement, so that consumers – if they catch the asterisk and actually read far enough down on the tiny-print part of the page – can calculate the real cost of their trip.

The airlines now want to play a government approved shell game – and if the DOT lets them, you can bet that no advertised fare will be truthful – and no one will be able to make a purchasing decision knowing the true cost of what they just bought.

The airlines are arguing the rationale for this request is to give them more flexibility in designing their ads. (Are you laughing yet?).

The real reason is the airlines know they have to charge higher fares in order to survive. They just don’t want to tell anyone (as if we won’t find out). By being allowed to hide certain charges, their proposal would allow them to hide those price increases, and bury them in a parade of newly titled charges that go way beyond the price of oil.

I don’t deny any airline the right to make a profit, and to charge a fair price, especially in an era of skyrocketing costs. But for the DOT to relax the rules is to be IN denial, and it sets the most dangerous precedent because it also allows the airlines to gouge without accountability. Worse, it makes them the undisputed dukes of deception, because they can officially advertise fares that make them look like low-fare carriers when nothing could be further from the truth.

Here’s my idea: let’s just change the pricing rules altogether, and insist that the airlines break out ALL their costs and fees when quoting prices: what’s the fee for talking to a human being? The charge for visualizing an onboard meal? And let’s not forget the special levy for granting executives stock options. But I’m not done yet. Don’t forget the lavatory surcharge and the lost baggage recovery fees.

Seriously, can’t we simply get back to one, simple, all inclusive price for each flight that has to compete in the open marketplace? And language in ads that doesn’t contain an asterisk?

And, going back to those “one-way fare requiring a round trip purchase” come-ons, don’t forget that two of the most profitable airlines – Jet Blue and Southwest – have been selling individual one-way tickets, with no additional restrictions and required Saturday night stays, for years.

Now, more than ever, we need transparency in pricing. Once again, the airlines underestimate the intelligence of your customers, because right now I hope we can all see through this.