UPDATE 2-U.S. government seeks greater disclosure of airline fees
* Agency proposes rule to spell out bag, seat charges
* Move comes as industry backs bill to play up base fares (Adds comment from airline group)
By Karen Jacobs
May 21 (Reuters) - U.S. airlines should disclose fees for checked baggage, carry-on items and other services to make it easier for travelers to discern the true cost of a ticket, the federal government said on Wednesday.
The proposed Transportation Department disclosure rules, which build on regulations from 2009 and 2011, would stipulate that online flight search sites like Expedia Inc, Google Inc and Kayak provide more information.
Carriers would have to spell out specific charges for carry-on items and advance seat assignments.
Airlines for America, a Washington-based lobby for U.S. airlines, said the proposed rules could raise airline costs and result in higher airfares or reduced service.
"We believe this proposal overreaches and limits how free markets work and will have negative consequences," Airlines for America spokeswoman Jean Medina said in a statement.
A Southwest Airlines spokesman said the carrier has not had enough time to review the proposals. American Airlines and United Continental deferred to Airlines for America for comment.
The proposed consumer protections come as the airline industry supports legislation that would roll back rules requiring greater disclosure of fees and taxes for airfares.
The Transparent Airfares Act of 2014 would allow airlines to play up base fares in advertising, but disclose taxes and fees separately. The measure is backed by Airlines for America. A counter measure to keep current rules in place was recently introduced by Democratic Sen. Robert Menendez of New Jersey.
The DOT said it expects to issue a final rule on the latest proposals next year.
The move is "a direct pushback to what A4A (Airlines for America) is trying to do, which is to really make things more opaque," said Robert Mann, an airline consultant in Port Washington, New York.
"That's the way airlines used to advertise and the DOT banned it long ago," Mann said.
In recent years, airlines have implemented extra charges for items once included in the ticket price. More airlines have added these so-called ancillary fees, with low-cost carrier Frontier Airlines last month disclosing it planned new charges for carry-on bags and certain seats.
The Transportation Department said charges for additional air-travel services were difficult for buyers to determine up front.
The proposal would also require airlines and agents to disclose on website itinerary displays whether flights sold are operated with other carriers. Big travel agents would have to respond quickly to consumer complaints and offer the option of holding reservations at quoted fares without payment for 24 hours if made a week or more before departure.
The agency is also looking to expand the number of carriers reporting on-time performance and mishandled baggage rates to airlines that account for at least 0.5 percent of U.S. scheduled passenger revenue from 1 percent. The DOT said that change would affect carriers like discounter Spirit Airlines. (Reporting by Karen Jacobs in Atlanta; editing by G Crosse, Paul Simao and Diane Craft)
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