The U.S. Department of Transportation aims to collect from
major U.S. airlines revenue data in 16 new ancillary fee categories, according
to a rulemaking proposal filed in the Federal
Register Friday. The disclosures would bring about new levels of fee transparency
and could open the door to new taxation.
In addition to baggage fee and change fee revenue, which
airlines already report, DOT would require carriers to disclose revenues
generated from booking fees, various inflight services, seat assignments,
travel insurance and other offerings.
DOT also is considering changing how carriers report
mishandled checked baggage rates, currently reported as the rate per 1,000
passengers. The new proposal would change that to the percentage of mishandled
bags for all bags checked. DOT suggested the proposal would better account for
true baggage handling performance, especially as the total number of checked
bags has decreased by up to 50 percent since fees for checking became
widespread, according to U.S. Government Accountability Office data cited by
DOT.
Though DOT is not explicitly proposing that ancillary
revenue disclosures be subject to new taxes, the transparency of those revenue
streams could open the door for such efforts, which already have been floated in
Washington.
DOT noted that "some reservation change and
cancellation fees, fuel surcharges and peak travel day charges are subject to
the 7.5 percent excise tax," but added that "many airline-imposed
fees for airline services are generally not subject" to such taxes.
DOT's proposal includes a definition of ancillary revenues
"as those charges paid by airline passengers that are not included in the
standard ticket fare. Generally, all mandatory charges necessary for air
transportation are included in the ticket price, but fees for optional services
are not." The proliferation of a la carte pricing strategies has enabled
airlines "to lower airfares while increasing overall revenues,"
according to DOT. "At the same time, revenues to the Airport and Airway
Trust Fund have slightly decreased."
DOT enlisted ATPCo to help identify categories of ancillary
revenues. ATPCo "has over two hundred sub codes for the items that the
Department is proposing to define as ancillary airline revenues,"
according DOT, which "is not proposing to require the detailed breakout of
all the charges identified by ATPCo, but is using the ATPCo list of charges as
a reference in developing the new reporting form."
DOT acknowledged airlines would incur expenses to meet the
data disclosure requirement and sought their comments to assess the cost of
compliance. DOT is accepting public comments on the proposal through Sept. 13.
Source: The Beat