More Consumer Protections: Good News, or Bad?

By now, you’ve probably seen Carl Unger’s excellent summary of the Department of Transportation’s (DOT) call for a complete review of consumer protections. As you can see, the proposals go far beyond just the higher bumping compensation that generated immediate national attention.

Initially, the individual proposals are just that—trial balloons about which DOT has not come to firm conclusions and would like to receive opinions from consumers, airlines, and other interested groups. Overall, however, these proposals open the door to consideration of a wide range of very specific consumer benefits.

This is an important enough issue that I’m sure several of us will have opinions and conclusions. Here’s my first take; later we’ll look at the specifics in more detail—as well as the inevitable unexpected consequences that you might see.

Higher Bumping Compensation

As the press has widely picked up, DOT proposes to increase maximum compensation for involuntary bumping due to oversales, as well as to provide more information to help potential bumpees evaluate their options. Specific proposals would require airlines to offer an involuntarily bumped traveler:

• Monetary compensation amounting to 100 percent of the traveler’s one-way fare if the airline can’t reschedule the traveler to arrive at a domestic destination within one hour of the originally scheduled time, with a cap of $650, or 200 percent of the one-way fare if rescheduled arrival is not within two hours, with a cap of $1,300. Time limits double for international flights. What’s new here are the dollar caps, which are significantly higher than current caps.
• Compensation for travelers on “zero fare” tickets, such as frequent flyer awards, “free” companion tickets, and consolidator tickets. The proposal suggests that compensation be calculated as if the travelers had used the lowest available fare; alternatively, compensation could be in the form of frequent flyer miles or voucher equivalents. This proposal represents a new clarification of policy that had not been previously covered in adequate detail.
• Additional disclosure of the chances of being overbooked and the options available.
• Extension of bumping rules to smaller planes, down to regional turboprops of 19-29 seats.

It’s hard not to like the various proposals. In fact, the main problem is that they still don’t cover enough.

Full-Fare Advertising

Recognizing the many recent technological changes in the ways airlines can communicate fare information to travelers, DOT proposes to require that airlines:

• Include all mandatory fees, taxes, and add-ons to all fare displays and communications. This requirement would cover passenger facility charges and segment charges that are currently exempted from inclusion.
• Not add any “opt-out” extras that would otherwise be added to the purchase price unless a traveler specifically refuses them.

This provision, too, is long overdue. The main weakness is that, unfortunately, DOT proposes merely to clarify the deceptive “each way based on round-trip purchase” fare advertising rather than prohibit it outright.

Codeshare Issues

DOT determined—correctly—that many passengers have a really tough time trying to figure out the varying requirements for codeshare flights. For example, if you’re flying on a ticket issued by Airline A but your flight is actually a codeshared flight operated by Airline B, you pay Airline B’s various fees and are subject to its requirements—baggage, seat assignments, snacks, unaccompanied minor, or whatever—not those of the airline from which you bought your ticket. DOT proposes that airlines must:

• At a minimum, disclose any significant differences in fees or requirements between a ticketing line and a codesharing partner.
• Possibly require codesharing airlines to adopt uniform fees and requirements.

This is a “no-brainer.” Travelers need to know before they buy tickets, not when they arrive at a departure counter. Again, the proposal doesn’t go far enough, especially with frequent flyer tickets.

After-the-Fact Price Changes

At present, rules allow carriers or operators to change fares after original purchase, even for travelers with fully paid tickets, so long as that possibility is disclosed. Apparently, DOT found that although airlines don’t do this, some tour operators frequently do, to pass along “fuel surcharges” or any other adjustments. Instead, DOT proposes to ban the practice of post-purchase price increases, no matter what. This is another no brainer.

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Choice of Forum Provisions

Currently, some airlines and tour operators incorporate “choice of forum” requirements in their fine print that require travelers with grievances to seek legal redress in inconvenient and possibly hostile legal “forums.” In effect, this means that if you want to sue an airline or operator, the contract may limit you to a jurisdiction across the country or even in a foreign country. DOT has concluded that such choice-of-forum provisions are unfair and deceptive. Instead, it proposes that consumers should be able to seek legal redress in any “competent jurisdiction,” including the area of a consumer’s residence, as long as the airline does business in that area.

This is a “sleeper” requirement that could be an extremely important improvement for consumers. Over the recent years, we’ve observed that as airlines increasingly stonewall legitimate complaints, the only remedy available to a consumer is to initiate legal proceedings in small-claims or other courts.

Tarmac Delays

DOT proposes to firm up its previously announced programs to reduce the incidence of extended tarmac delays. The current proposal covers a requirement for airlines to prepare improved contingency plans for tarmac delays, an increase to the number of airports covered, and requires airlines to coordinate plans with airport management. It also proposes to require similar compliance by foreign airlines.

We’ve previously reported on tarmac delay requirements and speculated about possible consequences. As we noted then, you’ll have to wait until next winter’s bad weather to decide the net effect of this requirement.

Customer Service Plans

Currently, DOT requires all U.S. carriers to adopt comprehensive “customer service plans” that specifically cover 12 important points and make them readily available to consumers, especially online. In our experience, most U.S. airlines comply. DOT notes, however, that the customer service plans provided by some lines are vague or insufficiently specific. DOT also notes that many U.S. travelers fly on foreign carriers, either directly or on flights codeshared by a U.S. line, and that some foreign airlines do not post or adhere to such plans. DOT therefore proposes that:

• U.S. airlines be required to meet appropriate standards of specificity such that travelers have accurate and detailed knowledge of just what the airlines have promised to do.
• Foreign airlines serving the U.S. be required to adopt, follow, and audit similar customer service plans.

The specific DOT proposal covers each of the points in too much detail to repeat here. Each airline, however, already posts the main points online.

Contracts of Carriage

As noted, the documents that actually govern what airlines are required to provide are contracts of carriage. And, for some time, DOT has required U.S. airlines to post those contracts online and keep them current. However, in most cases, those contracts are long, full of legalese, and drowning in arcane details that make it difficult for consumers to use them. In response, DOT proposes that airlines be required to incorporate their customer service plans as part of the contracts of carriage, thus binding the airlines to the much clearer language of the service plans.

This is yet another no brainer. The language of the service plans is much more accessible, and anything promised in those plans should clearly become a contractual obligation.

Check it Out, then Act

DOT has posted the full proposal in an easily downloadable form. It’s long—84 pages—but you can either read it online or print it for closer study. We urge you:

• Read and consider the proposal carefully.
• Submit comments to DOT online, by fax (202-493-2251), or by snailmail at Docket Management Facility, DOT, 1200 New Jersey Ave SE, Room 12-120, Washington DC 20590.
• Post your comments below for our use in reviewing the options.