More than 700 million passengers board domestic airline flights every year in the U.S. Airlines, and 700 million passengers means big money. Human nature being the way it is, it is unsurprising that absent sufficient consumer protection regulations, airlines will find a way to fleece passengers through the use of sharp business practices.
Part of the job of the U.S. Department of Transportation (USDOT) is to create regulations that make it more difficult for this to happen. In October 2016, the USDOT announced a series of new regulatory initiatives aimed at enhancing consumer protection, as detailed below:
The New Initiatives
- Refunds for delayed baggage: As things stand now, airlines must reimburse you if they lose your baggage, but not if the delivery of your baggage is delayed. Soon, airlines will be required to reimburse you a certain amount if the return of your baggage is “substantially delayed.”
- Expanded reporting requirements: The USDOT will greatly expand reporting requirements applicable to airlines. The number of airlines that will have to report data on mishandled baggage, late flights and overbooking will be expanded to include small airlines that are currently not subject to these requirements; reporting requirements for major airlines will be expanded to include information about regional airlines they work with; and airlines will have to report more detailed information on mishandled baggage (especially wheelchairs). All of this information will be made public.
- Disclosure of conflicts of interest: Airlines and online ticket agents such as Orbitz.com will be required to disclose any conflict of interest that may affect how they present information to consumers concerning available flights (by favoring certain airlines for business reasons, for example).
Upcoming Reforms
In addition to the above-described initiatives, the USDOT is currently considering regulations that would:
- Require travel agents to comply with certain federally-mandated minimum customer service standards, such as a 24-hour cancellation period; and
- Expand the scope of the foregoing of consumer protection rules so that they apply to anyone who sells airline tickets, not just travel agents
It remains to be seen whether the USDOT will actually enact these regulations; a lot depends on the agenda of incoming Secretary of Transportation Elaine Chao.
Under Consideration
In addition to the above-described policy changes, the USDOT is exploring several other consumer protection initiatives for the airline industry, including:
- Pricing reform: These days it seems buying your ticket is only the first of your expenses when flying with U.S. airlines, because they so often add hidden charges such as baggage fees and advance seating fees that have to be paid for separately. In many cases, even ticket agents cannot give consumers a total price, because they are unaware of the amounts of these fees or because the fees are subject to change even after the consumer has bought the ticket. The USDOT is considering requiring airlines to provide online ticket agents with enough information to provide consumers with a single all-inclusive price.
- Transparency initiatives: The USDOT may go beyond merely requiring ticket agents to disclose conflicts of interest affecting their presentation of information on available flights (see above). Airlines may even be required to provide online ticket agents with full information concerning available flights, instead of merely disclosing an existing conflict of interest.
All of these initiatives are likely to remain politically sensitive as the USDOT struggles to protect consumers without burdening the airline industry with excessive regulations.