Source: US wants airlines to make cost of flights more transparent

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WASHINGTON, Oct 18 (Reuters) - The White House plans to announce steps aimed at promoting competition in the U.S. airline industry and increasing transparency in pricing, a source said on Tuesday.

The S&P 1500 airlines index, which includes large and small U.S. airline stocks, fell by nearly 2 percent and briefly turned negative in early afternoon trading. By late afternoon, it was up 1 percent.

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The source briefed on the matter said that the White House effort was aimed at ensuring that consumers had better information about air travel costs and airline performance.

A Credit Suisse Research report said that the announcement also had to do with fee disclosures and access to airlines for disabled passengers.

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In August, Democratic U.S. senators Richard Blumenthal, Edward Markey and Elizabeth Warren urged the Transportation Department to use its existing authority to allow price comparison websites - like Travelocity, Priceline, and Kayak - to have access to airline pricing information.

"Given the unprecedented level of consolidation within the airline industry, it is more important than ever that Americans maintain the ability to comparison shop," they wrote. "We write to raise our concerns about potentially anticompetitive and anti-consumer behavior among airlines that may be suppressing consumer ability to make informed flight decisions."

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For months, airlines have been trying to draw passengers away from low-price comparison sites and back to their own home pages. They see customizing travel packages with airport lounge access, extra legroom or hotel stays as the area where revenue has the most room to grow.

The airlines' efforts have put them at odds with some online travel agencies that do not allow for upselling beyond the base airfare. It also has drawn ire from consumer advocates who say airlines are attempting to hamper comparison shopping and boost prices.

In an interview last year, an executive at United Continental Holdings Inc said the carrier aims to be agnostic about where customers can buy its services, whether on its website or on a site such as Expedia. United has started working with partners to place as many ancillary products on price comparison sites as possible, said Scott Wilson, United's vice president for eCommerce and merchandising.

However, he added, "This expectation of universal and perfect comparison shopping in an industry that by its nature has different fleet types, different seat type, different food -different, different, different, different - I've never fully understood." (Reporting by Diane Bartz and David Shepardson in Washington, and Lewis Krauskopf and Jeffrey Dastin in New York; Editing by Joseph White and Lisa Shumaker)

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