How Useful Are the DOT’s New “Passenger Protections”?

By now, you’ve probably seen or read that the Department of Transportation announced its final “Passenger Protections” rules. As is typical with such rulings, some self-styled consumer advocates praised the results, some decried them as inadequate, and some said, “Ho, hum – more of the same.” A reader wanted to get our take:

“Will those new rules really help us or can we expect more of the same?”

The short answer is that, viewed individually, the new rules are almost all improvements. But when viewed against the overall plight of air travelers, they fail to address some of the worst airline abuses that continue to plague travelers.

Honest Airfare Advertising

On the question of honest fare advertising, the DOT got half of it right: Airlines will be required to include all applicable mandatory taxes, fees, and charges in their advertised fares. The main change here is that airlines will have to include the per-passenger fees and taxes that are currently not included in the advertised fares. Clearly, this will make price comparisons easier and allow consumers to determine their trip costs more precisely. This is an unequivocal win for consumers.

{{{SmarterBuddy|align=left}}}The DOT rules also clarify that the new fare display rules apply to third-party “ticket agents” as well as to airlines, themselves. The real question here is how well ticket agents will follow this rule – and how closely DOT will enforce it. Currently, I still see fare quotes from some consolidators that exclude those phony “fuel surcharges” and other fees. Let’s see how this rule operates in practice before we make a judgment.

As a corollary to the concept of full fare disclosure, the new rules also prohibit “opt out” provisions in any advertising. I haven’t seen much of this, but some lines have apparently posted travel insurance as an opt-out extra. Whether the problem is common or rare, specifically prohibiting it is a net gain.

Unfortunately, DOT decided not to prohibit two major forms of potentially misleading advertising:

• Airlines will still be able to post fares at half their real price as “each way based on round-trip purchase.” Although that practice clearly violates the very base of the concept of “show the real fare,” DOT instead adopted the wishy-washy fix of simply insisting that airlines say “each way” rather than “one way” in such deceptions. Feh!
• Airlines will still be able to post prices for packages as “per person, double occupancy,” again violating the Department’s own professed enthusiasm for “show the real price.” Still, this practice is so ingrained in the travel industry that I suspect you’d hear the industry’s howls around the country if DOT actually tried to enforce this degree of honesty.

Increased Bumping Compensation

The compensation for “bumping” you due to overbooking increases substantially. Instead of giving you the value of the one-way fare, with a cap of $400 if your delay in reaching your destination is short (one to two hours domestically, one to four hours international) or double the fare capped at $800 for a longer delay, the new rule calls for 200 percent of your fare capped at $650 for a short delay and 400 percent of the fare capped at $1,300 for a long delay. The new rule also specifies that travelers on “zero fare tickets” such as frequent flyer awards are also due the compensation, based on the lowest available fare. And the rule clarifies airline responsibilities to inform you of the cash award in addition to any voucher the airline might offer.

Those increased rules are certainly welcome, but they fail in three important aspects.

• Presumably, the idea of payment is to compensate you for your inconvenience, and I see no reason for the assumption that the inconvenience you suffer has anything to do with the fare you pay. The penalties should be a flat $650 for the shorter delays and $1,300 for longer delays.
• The denied boarding penalty applies only in the case of bumping due to overbooking. Obviously, you suffer just as much inconvenience if you’re bumped for some other reason, and the penalty should apply to all instances of bumping – at least those within an airline’s control – not just overbooking.
• The rules say nothing about requiring that an airline that bumps you should do whatever it takes to get you to your destination as quickly as possible, including putting you on another line.
• And the rules do not mandate that airlines give you maximum flexibility to continue, reschedule, or cancel your trip.

All in all, the new bumping compensation rules represent a tweaking of the old rules rather than any significant new benefits.

Fees

The new rules address the increasingly vexing problem of optional fees in several ways:

• Airlines must disclose and display any such fees earlier and more clearly on their websites during the purchase process.
• Airlines must impose the same baggage fees and allowances through an entire journey, as ticketed.
• When airlines sell a flight on a code-sharing partner, they must disclose any differences between their own fee policies and those that apply to the code-shared flight.
• If an airline bumps you or cancels your flight, it must refund any optional fees for services you were not able to use.
• If an airline loses your bag, it must refund any baggage fees you paid.

All in all, these are minor but welcome changes. DOT’s big failure was not to require that airlines refund baggage fees if they deliver your baggage more than two hours late.

Tarmac Delays

DOT reaffirmed last year’s ruling assessing huge fines for flights delayed on the tarmac more than three hours. And it extended coverage to foreign lines operating from the U.S., with a minimum delay of four hours, and to smaller airports. Your view of this change depends on your view of the overall tarmac delay rule:

• DOT says that, as a result of the earlier rule, extended tarmac delays dropped dramatically this winter and resulted in only a few more cancelations.
• Not so, says a report from The Airline Zone, an independent aviation study organization. Researchers Darryl Jenkins and Joshua Marks say DOT’s figures are incomplete and that the rule actually resulted in significantly more cancelations, as airlines canceled wholesale to avoid risking immense fines.

Personally, I find the Jenkins/Marks arguments compelling: It stands to reason that if an airline concludes that one of its flights faces even a slight risk of incurring a tarmac delay, the line will instead simply cancel the flight. As a result, although long delays have dropped, they were always rare, whereas the cancelations affected far more travelers. And, these days, finding a replacement seat can take several days, not just hours. Moreover, I don’t get the logic of having all of the fees go to the government. Shouldn’t at least some of that go to the travelers actually caught in a long delay?

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The self-styled consumer advocates who lobbied so strenuously for the new rules are claiming “victory.” On the other side, I’m afraid that the “cure” is worse than the disease. You decide.

Contractual Changes

Several new rules affect contracts between you and the airline. Chief among these is a requirement that when you make a reservation, an airline must hold that reservation for you at the quoted fare but allow you to cancel it, within 24 hours, with no penalty. That rule applies to reservations made a week or more in advance. After that, the airline can charge a fee if you want to cancel. That’s a significant gain for consumers, who would often like to lock in what appears to be a good deal while they scout around for something better.

New rules prevent airlines from including forum clauses in their contracts of carriage. Those clauses limit the courts in which you can take legal action against an airline – typically courts inconvenient or inaccessible to ordinary consumers. Instead, say the new rules, you have to be able to take action in any jurisdiction where an airline does business – and that effectively means just about anywhere in the U.S. This new rule sounds like more than it really is, however, because very few airlines actually have forum clauses in their contracts. Forum clauses are a serious problem with cruiselines and tour operators, but unfortunately DOT rules do not apply to them.

The ruling also prohibits post-sale retroactive price increases other than those due to new or increased government taxes – again, as far as I can tell, solving a problem that really doesn’t exist.

After studying the issue, DOT elected not to require airlines to incorporate their “customer service plans” into their binding “contracts of carriage.” This is a big loss for consumers: Those customer service agreements are far more accessible and readable than the contracts of carriage, and they often say or imply services beyond those in the actual contracts. My take is that if an airline includes it in the vague “plan” it should also be part of the contract.

Peanuts Still Fly

By far the largest percentage of public comments to the proposed rules dealt with the proposal to consider banning or limiting peanuts on airplanes. And most of those asked for either outright bans or severe restrictions because of the sometimes severe effects of peanut allergies.

DOT punted on this one, falling back on some bureaucratic requirement for more study. That “more study” will probably be going on when you’re old and gray.

Other Provisions

The new rules clarify and expand a number of reporting and disclosure rules and clarifications that expand some of the rules’ coverages and make it a bit easier to find out your various contractual rights. On the whole, however, you’re not likely to notice any differences.

The Big Failure

DOT’s biggest failure is not in the rules it actually adopted. It’s in the rules it didn’t adopt. Overall, it failed to redress the gross imbalance between the airlines’ contractual obligations to you and your obligations to the airlines.

Although initially on the list, DOT dropped a requirement that airlines be required to refund the full ticket value to travelers on severely delayed or canceled flights. Currently, although an airline may make a refund, it is not required to do so. Obviously, when a cancelation or long delay causes a traveler to miss a meeting, event, or whatever, that traveler no longer needs to take the trip and may have no need for a voucher or future credit. DOT caved on this one.

Although not on the DOT’s list of options, travelers clearly would benefit from a return to a mandatory “Rule 240” requirement for all airlines: In the event of a long delay or cancelation, and another airline can get a traveler to his or her next destination before the original line can, the original line should be required to transfer that traveler to the second line. Before deregulation, that practice was the norm among airlines, and travelers need its protection more than ever. Although DOT dropped the ball this time, public-interest attorney Donald Pevsner has already filed a petition for rulemaking for a new Rule 240.

DOT again decided not to get involved with the many obvious deceptions and abuses in big-line frequent flyer programs.

Timing

Most new rules become effective this August. Although possible, any delay or amendment is extremely unlikely.