U.S. Citizen to Secretary Foxx: Delta Airlines is Violating the Department of Transportation’s Rules





“Specifically the ‘Airline Passenger Protections’, ‘…banning post-purchase fare increases unless they are due to government-imposed taxes or fees, and only if the passenger is notified of and agrees to the potential increase at the time of sale’; AND ‘in addition, airlines and ticket agents will be required to include all government taxes and fees in every advertised price’ (source: U.S. Department of Transportation),” stated David Howe of Massillon, OH, and among many victims of Delta’s illegal pricing scheme.

http://www.businesswire.com/news/home/20131121006405/en/SubscriberWise-Chief-Files-Complaint-Delta-Airlines-Deceptive

http://www.subscriberwise.com/media/delta/delta_fare.pdf (includes a screen shot of post-purchase price change and increase)

“The time of sale is undeniably the moment a customer clicks ‘Agree to Purchase’,” argues Howe. “It’s an irrefutable fraud for Delta’s system to respond – after the fare has been selected and the option to purchase has been processed – with a price that’s instantaneously increased from the published and advertised fare. Delta has purposely manipulated its computers with this predatory pricing model. It’s also a fact that buying an airline ticket – for the overwhelming majority of American consumers everywhere – is a thoughtful, careful, and often expensive transaction. So when Delta Airlines exploits that final purchase decision with an on-the-fly price increase - because they realize that options are very often limited as it relates to locating a reasonable and desirable fare - they’re engaging in dishonest, immoral, unethical, and unequivocally illegal business practices, at least according to the U.S. DOT’s rules. It’s plain and simple,” Howe argues.

“Let’s consider the following Delta price-fraud analogy and put this into a different perspective. Imagine going out one evening to the local cinema to enjoy a movie with some friends,” continued Howe. “It’s a popular movie; a hot new release. As you eagerly make your way to the box office, you confirm the show times and prices. The information – including the price – is conspicuously published on the board above: $10.00 per adult for the evening show. That’s reasonable enough, you decide. You tell the agent that you’d like two tickets. She takes your credit card and swipes it. Sorry,” the clerk replies. “Please accept my apologies. It turns out this is a popular movie tonight,” she continues to explain. “Apparently our theater is going to sell out tonight. The computer predicts this…it’s like magic…a crystal ball, so I’ve been told. And although I regret that the published and advertised price remains unchanged at $10.00 per adult, because of this sophisticated software program that forecasts and calculates seating capacity, the new price I have to quote has just increased to $15.00 for each adult. Instead of the advertised $20.00 purchase, you now owe an after-the-agreed-purchase price of $30.00 for the two tickets. I’m so sorry. By the way, it’s only a modest increase of 50 percent,” she adds encouragingly. “Of course you can always think about it. Perhaps you should check on a later show…or come back on a weeknight when it’s less likely to be a sell out. You do have options, you know. And I do regret if you traveled to our theater because of the low prices that we advertise everywhere, including on our corporate website. I promise our business model is actually straightforward,” the agent says with confidence. “We attract and win customers just like you from our competitors with these low advertised ticket prices. Although it is true that once a customer has selected our theater and makes his way to the box office…decides on a show and time…and then provides payment…that’s when we’ve determined it’s the best moment to maximize our profits. That’s when the otherwise up-to-date and advertised price instantly increases in our computers. It happens all the time. But it’s difficult and very complicated to explain, these post-purchase increases. All I know is that it’s a pricing strategy that works nearly every time. Customer decides to purchase, provides payment…and BAM! Of course most customers lament…but they pay. Lucky for us….the frequent complaints and frustrations beyond the box office aren’t enough to justify a policy change,” explains the agent. “Somehow we’ve managed to stay under the radar of regulators. Yes, you could say the owners are really happy with this arrangement.”

“Think this scenario can’t happen?” continued Howe. “Think again because that’s exactly what Delta Airlines is doing with passengers who purchase tickets from the global carrier. And worse, they’re getting away with it despite FAA regulations that specifically forbid this behavior.

So why does the public allow Delta to engage in this classic ‘bait and switch’ pricing,” asks Howe rhetorically? It’s simple. The majority of Americans simply don’t travel with enough frequency. Most Americans who experience this fraudulent pricing scheme - although agitated and frustrated - decide it’s not worth the effort and instead pony-up for the ‘instant increase’. Take my parents, for example,” continued Howe. “They probably have flown only two or three times over the course of five years. If Delta engaged in this tactic at the conclusion of their booking session, they’d object initially but then just pay the increase. It’s exactly what I did the first time Delta surprised me with the post-purchase instant fare increase. Obviously I was angry, but because I was pressed for time and had a full agenda I just paid and forgot about it.”

“It’s a benefit that’s paying off profoundly for Delta,” Howe declares. “Delta has made a basic cost-benefit analysis. The carrier has recognized that they can generate millions with this pricing model. They know that it’s illegal by any reasonable standard. But the company has made a business decision. If and when there’s a consumer complaint, they merely justify the increase on some complex pricing that flows from some complicated supply-and-demand model that Economists wouldn’t even understand. Otherwise they excuse it as a computer glitch or browser caching. Delta always has an explanation but never an honest admission. The company understands that without sufficient FAA complaints and government oversight, it’s far more profitable to appease the vocal few while they profit profoundly from the silent majority who pay and forget about it.”

“So back to the theater analogy,” continued Howe. “Everyone should understand the reason why the nation’s cinemas haven’t leveraged Delta’s predatory pricing model: there are too many Americans who frequent theaters too often. Albeit that the vast majority of businesses in America choose to play by the rules and operate with integrity, including America’s cinema operators, it’s nevertheless that simple. The movie-going-public, a highly regular and often massive segment of the population, under no circumstances would they tolerate a pricing scheme that mimics what Delta is doing today. The fallout would be extreme. Just try and imagine this scenario next time you go to the movie theater.”

“In America, we must not allow Delta to continue this predatory pricing another day,” concluded Howe. “In every state, the citizens, their State Attorney General, and their legislators have said that organizations cannot engage in ‘bait and switch’ tactics. It’s not only common sense legislation, but instead its good corporate citizenship to treat consumers fairly. Therefore, I submit that we give Delta the opportunity to acknowledge their wrong-doing and to assure the public it will ‘cease and desist’ this practice immediately. I encourage Delta’s CEO to answer for his company, honestly and promptly.”

“In the meantime, I urge Secretary Foxx to enforce the federal rules. The Secretary should deliver an explicit message to Delta Airlines to end this prohibited pricing scheme immediately.”

Sincerely,

David Howe, Massillon, OH