As many have heard, consumer advocates were fairly united in support of the new Department of Transportation (DOT) rulemaking that was released last Wednesday. Heck I was the set-up person for the Secretary of Transportation on Fox News and NBC telling the world that this was the biggest change in passenger protections since deregulation. But there is still much to be done when it comes to airline fee transparency and other passenger protections.
In this column, I’ll focus on airline fee disclosure by the airlines.
Never before have so many consumer protections been codified in the federal regulations at the same time. From a couple of dozen lines of consumer-protection regulations as little as five years ago, the new regulations and their explanations now fill more than 200 pages in the regulations’ announcement.
As far-reaching as these passenger protections are, they still have a long way to go. Some changes to these new rules should be made immediately, before the 120-day implementation period is over, so that travel agents can do what the regulations require between this rulemaking and the next.
The biggest problem with this rulemaking comes in the handling of disclosure of airline fees. The airlines dodged a bullet and the consumers took another shot to the wallet. The Consumer Travel Alliance, American Society of Travel Agents, Interactive Travel Services Association, Consumers Union and others have all come out strongly in favor of electronic disclosure of airline ancillary fees such as those for baggage, seat reservations, early boarding, WiFi and so on. Fees presented in a database format can be used by central reservation systems to allow passengers to compare prices across airlines.
The airlines have been fighting tooth and nail to keep these fees hidden from travel agents and any traveler with the temerity to use a travel agent for their airline ticket purchase. The airlines fear an informed consumer. Their worst nightmare is the ability for consumers to compare the total cost of travel across airlines.
Heaven forbid! Just the thought of what the airlines call the commoditization of airline seats has them seeing red. Airlines claim that commoditization is a four-letter word in their marketing lexicon (unless the airlines commoditize their own product through code-sharing — the ultimate industry illustration that one airline’s seat and service is the same as another’s.)
Back to the rulemaking.
The DOT has admitted that they will need to examine this issue of airline price and fee transparency in more depth. After an extraordinary discussion last week with the primary architects of the rulemaking, even they realize that airline fee transparency and disclosure needs to be revisited and revisited sooner than later.
In the meantime here is the DOT rule:
…the Department believes that to ensure adequate protection of consumers, as well as to ensure a level playing field among airlines, it is best to require carriers to list all fees. This includes, but is not limited to, fees for checked baggage, carry-on baggage, overweight bags, meals, on-board entertainment, Internet connections, pillows, blankets, advanced or upgraded seating assignments, telephone reservations, early boarding, canceling or changing reservations, unaccompanied minors, and pet transportation.
I guess the good news coming from this interim rulemaking will be visibility of the levels of ridiculousness to which airline fees have risen. Forcing the airlines to list all of their fees in one place will underscore their immensity. Unfortunately, DOT is allowing the airlines to list ranges for these fees. So instead of knowing the fee for a seat reservation the airlines will be able to state, “Seat reservations Free-$90,” which will not be a big help for most travelers. (No, I am not making up the $90 seat reservation fee. It exists.)
OK. Let’s agree that there will be issues with an overall listing of fees with ranges of prices that don’t help consumers at all. In fact, these kinds of charts work in the favor of airlines by confusing passengers. Let’s focus on the area that the DOT requires specificity in the fees — baggage fees.
Here ticket agents are required to list the type of baggage fees that a passenger may have to pay on the itinerary. It sounds easy, but it isn’t. On Delta Airlines, for a couple traveling together, there are 64 different permutations of baggage fees that may be charged. If the airlines will not be required to provide travel agents these fees, where will they get the information? If the travel agents do not have the information, will they be fined? In any case, airlines will be sitting pretty even though they have complained vociferously.
We disagree with the assertion by some carriers that consumers cannot complete a purchase without first becoming aware of the applicable baggage fees. Given the advent of new fees, such as fees for carry-on bags, the differing price for first and second checked bags, and the price difference that sometimes exists if a consumer checks his or her bag online versus checking the bag in at the airport, the Department believes that it is not a simple matter for consumers to determine the total price to transport their baggage. Additionally, the Department disagrees with airlines that assert that the disclosure requirements are burdensome, as most carriers already provide this information in one form or another.
Yes, DOT, the airlines provide this information, but the ticket agents do not, because the airlines will not disclose this information to them. DOT needs to force the airlines to disclose at least this baggage information during the interim rulemaking period. Otherwise, what they are directing ticket agents to do will not be possible.
Note: The airlines are planning on releasing these highly proprietary fees to Google in the not-too-distant future. Why can’t they release them to travel agents? Needless to say, consumers are getting hosed and will continue to be deceived by the airline under the protection of DOT until this situation is corrected.
The proposed schedule for the third passenger protection rulemaking has relief scheduled for passengers in late 2012. DOT can do better. Airline fees are only going to increase and become more complex during the ensuing year and a half.
I urge the DOT to take another look and in the rulemaking during this interim period before full implementation. Require the airlines to use their already-tested ATPCO system to deliver baggage fees to all travel agents while DOT continues wrestling with the larger question of how to handle the hundred of fees that the airlines are creating to add more and more complexity to the airline ticket purchasing process.