[Travelandtourism] Southwest Airlines Challenges DOT's new advertising rules

[cheryl echevarria]

Southwest Airlines challenges DOT's new advertising rules
Before you read the article, the reasons Southwest, who also now own Jetblue and some other airlines, about 4 or 5 have issues with the new advertising rulings.

This might not mean a lot to the everyday traveler all this ASTA and judges rulings, but in any event, because these airline are not under the ARC, which stands for Airlines Reporting Corporation, which Southwest doesn't belong to, in the long run even though they are cheaper and offer free luggage on your flights, they are not playing the rules in the background.

Just and FYI before reading.


By Bill Poling
Southwest has plunged into the legal dispute over the Transportation Department's new consumer rules, joining Allegiant and Spirit in challenging a portion of the package in the U.S. Court of Appeals. 

Southwest, which is limiting its challenge to the DOT's price-advertising rule, also filed a request for a stay at the DOT. Allegiant and Spirit have also requested a stay and have further indicated that if the DOT does not suspend the challenged portions of the rule pending judicial review, they will ask the court to do so. 

The DOT has also been asked by ASTA to defer two provisions affecting agents that it deems to be unworkable at the present time, and virtually all major U.S. and foreign carriers have asked that they be given more time to prepare their systems and train their employees to deal with the numerous rule changes. 

The DOT is expected to address those requests any day. The effective date for most of the new regulations is Aug. 23; the price-advertising rule becomes effective Oct. 24. 

In its filings to the court and to the DOT, Southwest said the change in the long-standing price advertising rule is "arbitrary and capricious" because it is being made on the basis of "unsupported speculation" rather than hard evidence about consumer confusion. 

The current rule, in place for over 25 years, requires all advertisements and Internet displays that show price for air travel (or for a package that includes air travel) to show the full price, except that certain government-imposed taxes and fees can be stated separately. The DOT has strict guidelines on how the disclosure of taxes and fees must be made. 

Southwest said the record of the DOT's rulemaking is devoid of any evidence that consumers find the current rule "deceptive." 

The new rule will require that the airfares or package prices in ads and Web listings include all mandatory taxes, fees and service charges, including the agent's booking fee. 

In its filing to the DOT, Southwest included a six-page affidavit from Dave Ridley, its senior vice president of marketing and revenue management, stating that the "total estimated financial impact on Southwest in complying with the new DOT advertising rule is between $24 million and $30 million, consisting of one-time compliance costs as well as lost revenue due to the diversion of limited technology resources away from previously planned revenue-generating initiatives." 

He further stated that the requirement to include all taxes and fees will make it "impossible for Southwest to advertise a single accurate price to cover all possible itineraries" between certain origin and destination points, because of different tax levels for routings using different intermediate points. 

"The rule will thus have the effect of suppressing price advertising, and airline price competition will therefore be reduced," Ridley said. 
 
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