At 36,361 words, the document laying out the latest proposed Transportation Department passenger protection rule is an epic, a few pages longer than Franz Kafka’s novella “The Metamorphosis.”
Passenger advocates hope that after a 90-day comment period, the proposed regulation will bring positive changes to the way Americans fly. Airlines, however, claim that the story will have a darker ending, leading to an overregulated aviation industry in which customers pay more to fly.
The proposal, which you can view and comment on at Regulations.gov (search for DOT-OST-2014-0056), would require airlines to show certain basic fees upfront, at the time a fare is displayed. It would also add new reporting requirements for smaller airlines and require online travel agencies to adopt consumer protection policies. Taken together, these requirements represent an incremental, and long overdue, upgrade in the air travel experience.
But this assumes that the DOT will embrace the planned rules, and that Congress won’t interfere.
If you think that the airline industry hates the new rules, you’re almost right. In a brief statement, Airlines for America (A4A), an industry trade group, denounced the DOT actions as overreaching and warned of “negative consequences.”
“The government does not prescriptively tell other industries — hotels, computer makers, rental car companies — how they should sell their products, and we believe consumers are best served when the companies they do business with are able to tailor products and services to their customers,” it said, adding that the rules, if enacted, would probably “further increase airline expense, and force airlines to pass on the additional costs to customers in the form of higher fares or reduced levels of air service.”
I asked an A4A representative how these rules might increase the cost of a ticket and was told that the industry group was still studying the proposal.
Passenger advocates are pleased with the proposed regulations. “DOT’s actions reinforce the agency’s unique role as the only forum — state or federal, judicial or regulatory — where consumer protections exist for airline consumers,” says Kevin Mitchell, who runs the Business Travel Coalition, a group that represents corporate travelers. Mitchell notes that the proposal is particularly necessary in light of an effort in Congress to turn back the DOT’s previous rule, which created the so-called “full-fare” advertising rule for airline tickets, requiring airlines to quote a ticket price that includes mandatory taxes and fees.
But how, exactly, would these new rules help passengers — or hurt airlines?
At the heart of the proposal is a requirement that airlines and ticket agents reveal fees for certain services associated with airline tickets at all points of sale. The DOT defines these as a first and second checked bag, a carry-on item, and advance seat assignment.
Why are the rules necessary? The Transportation Department says that fees for additional services are often difficult to determine when searching for airfares. As a result, many travelers can’t understand the true cost of travel before purchasing a ticket.
Actually, that’s a nice way of putting it. Airlines have made billions by systematically redefining what’s included in the cost of an airline ticket. Quietly stripping the ability to check a bag, reserve a seat and even carry a bag on board from the base fare allows air carriers to claim that their tickets have never been more affordable while they still earn a tidy profit. Last year, for example, domestic airlines collected $3.3 billion in baggage fees.