It’s almost impossible to sue an airline except for violations of federal law and explicit breaches of contracts (and they write the contracts). State contract claims like duties of good faith and fair dealing are pre-empted by the Airline Deregulation Act. This was ruled explicitly on with regard to frequent flyer programs two years ago in Northwest v. Ginsburg.
But consumers can complain to the Department of Transportation (even if DOT has been improperly ignoring legitimate loyalty program complaints). They can also sue in small claims court, where pre-emption issues are unlikely to carry as much weight and where the cost of an appeal is likely greater than whatever relief is obtained.
In the UK, though, airlines will soon be able to charge consumers for certain kinds of complaints.
On August 21, it was revealed that several U.K. airlines would start charging passengers £25 ($33) to file a grievance.
Though fliers can still write a letter of complaint without paying a cent (though who writes a letter?), airlines have changed their approach to protracted claims: Earlier in August, the Civil Aviation Authority (CAA) announced that it would hand off the task of dealing with complaints to dispute resolution companies.
Previously, the CAA was in charge of mediating between customers and airlines for a variety of issues—flight cancellations, missing luggage, and how much disgruntled travelers should be compensated. But those rulings were not legally binding, and passengers would often turn to the court if the airline refused to pay.
With this new third-party system, the decision will be legally binding—and keep cases from landing in court. Some of the companies charge for their services, which means airlines may now pass on the costs to customers if the disputes can’t be solved internally.
The Centre for Effective Dispute Resolution “charges £25 for unsuccessful claims and registered users include British Airways, easyJet, Thomas Cook and cruise company TUI.”
You can still complain directly to your airline and you now have a binding mechanism to push farther if the airline doesn’t address your concern. But in the case of British Airways and easyJet which are using a service that charges consumers who lose, there’s a cost to following up and seeking outside redress.
The £25 fee is charged up front, and then refunded if the customer prevails.
Not all private dispute firms charge a fee. Ryanair and Wizz Air use a firm called Retail Ombudsman, which does not charge consumers.
While less costly to consumers than going to court, companies also prefer alternative dispute resolution. What remains to be seen is what outcomes of these proceedings look like. Will the Centre for Effective Dispute Resolution get to keep the British Airways contract if they rule against BA too frequently?