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Originally published Monday, January 30, 2012 at 11:27 AM

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Airfare sticker shock could dampen sales

Travelers may be unpleasantly surprised when seeing the true cost of airline tickets, thanks to new federal rules.

Los Angeles Times

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"the new rules are intended to hide federal taxes." The airlines can post... MORE

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New federal regulations aimed at giving airline passengers the true price of their tickets when booking a flight may provide some travelers with an unpleasant surprise.

The U.S. Transportation Department rules that took effect Thursday require airlines to include all mandatory taxes and fees in their advertised prices. But travel experts say the rules may have the unintended effect of reducing airline ticket sales by scaring away passengers with prices that suddenly seem much higher than in the past.

But the effect should be only temporary, said Anne Banas, editor of the travel review site SmarterTravel.com.

"At first, consumers might face a bit of sticker shock, as pricing will seem much higher upfront," she said. "But ultimately it'll be easier for them to compare prices across multiple airlines."

Steve Lott, a spokesman for the Air Transport Assn., the trade group for the nation's airlines, said, "It's basic economics that when consumers believe that the price of a product or service is higher, then there is the potential that demand will fall."

The airlines are not required to include optional fees, such as fees to check baggage or buy food or onboard entertainment, in the advertised price.

When the rules were proposed more than a year ago, the nation's airlines protested, arguing that no other industry is required to wrap fees and taxes in advertised prices. Three carriers — Southwest, Spirit and Allegiant — filed a lawsuit to halt the rules. The lawsuit is still pending.

Spirit Airlines has gone a step further in its opposition. Spirit last week launched an online campaign, contending that the new rules are intended to hide federal taxes.

The Florida airline created a website, www.keepmyfareslow.org, where it suggested that the rules allow federal officials to "carry out their hidden agenda and quietly increase their taxes."

Sen. Barbara Boxer, D-Calif., lashed out at Spirit in a letter to the airline's chief executive, Ben Baldanza, saying the carrier is misleading the public about the intention of the new rules.

"I urge you to immediately send a clarifying email to your customers and remove the misleading information from your website," she wrote in the letter.

Spirit spokeswoman Misty Pinson said she was disappointed in Boxer's letter and refused to back down on the airline's position. Pinson added, "We would welcome the opportunity to sit down with her and discuss the facts so she is fully informed."

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