Where’s the outrage?

By | April 24th, 2011

I have just one question in the wake of the Transportation Department’s so-called “historic” rulemaking on airline passenger rights.

Why isn’t the airline industry upset?

The new regulations will force airlines to disclose their fees more clearly, increases denied boarding compensation, requires airlines to reimburse checked baggage fees when they lose your luggage, and bans post-purchase fare increases, among other things.

And the industry’s reaction? It thanked the government.

[The Air Transport Association] appreciates that DOT shares our goal of providing safe, reliable transportation, treating customers fairly and providing the best service possible.

The airline industry supports increased communication and full transparency, ensuring that our customers always know exactly what they are getting every step of the way; and market forces – not additional regulations – are already providing customer benefits.

As the DOT statistics demonstrate, airlines already have made many service improvements and many of the regulations formalize procedures already in place, including prompt delay notification, one-way fare advertising, and irregular-operation contingency plans.

Here’s the full statement. Looks pretty tame, doesn’t it?

The other trade group, IATA, was a little annoyed by the new regs. In a statement sent to the press, it called the new rules “short-sighted” and predicted airline passengers might suffer as a result.

It’s particularly unhappy with new rules that affect international airlines, saying, “This intervention into international airline business practices will result in increased cancellations, higher ticket prices and greater inconvenience for passengers.”

The usual chorus of airline apologists was surprisingly quiet after the DOT’s announcement.

And that has me worried.

Related story:   Are "custom" airfares good - or evil?

If, as the government claims, these rules are so helpful to airline passengers, then we should see passengers doing backflips because they’re so happy, and airlines threatening to sue the DOT for overregulating their business.

Instead, passengers are lukewarm to the new regs, wich failed to address the two most important issues to them (peanut allergies and fare transparency). They believe more regulations are needed.

And airlines? I think it’s possible they are pleased with the government’s actions. Sure, they have a few new rules to worry about. But on the big issue — disclosing their highly-profitable ancillary fees — they dodged a bullet.

Even with a supplemental rulemaking later this year that promises to clarify surcharges at the point of sale, the airlines still get to charge these unconscionable a-la-carte fees as they have been, through most of 2012.

That’s another year of confusing and deceptive pricing — another year of ill-gotten profits.

Has the federal government just done the airline industry a big favor masquerading as new regulations?

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