The Department of Transportation has had a lot of potential rules for how air travel should work on its docket. And it made a big announcement which doesn’t amount to very much. Fortunately.
Two years ago the Department of Transportation closed the public comment period on proposed airfare pricing transparency rules.
- The DOT was looking for ways to require all booking sites to display a single uniform set of information about fees (and couldn’t customize this to individual consumers, based on the type of trip they were taking, and whether or not they had elite status). That would have ended innovation from companies like Google who are working to customize travel information and bring relevant advice to consumers.
- It would have also created real problems for opaque booking sites, ending businesses like Hotwire as we know it.
- The original version of the proposal even suggested ‘popups’ for fees, completely ignoring how consumers are buying more and more travel via mobile (which doesn’t really do popups).
- They were also proposing that any site displaying airline schedules disclose when airlines weren’t included in the display (free advertising for Southwest), to alter how airline fee data is provided to online travel agencies and through computer reservation systems, and to change the rules around mistake fares (they’ve gutted those protections pending a new rule). There were other suggested actions as well.
So what did the Department of Transportation actually do? Effective January 2018 they will:
- Require airlines to report their on-time performance inclusive of that of their regional carriers. So Delta’s on-time performance will be affected by regional airlines. Here the big work, it seems to me, needs to simply be adjusting the forms airlines are required to use — as it stands form 41 data doesn’t really make it possible to identify the regional carrier and the major airline(s) they’re flying for. In addition, more airlines (such as Allegiant) will have to report on-time data.
- Require refunds of baggage fees when bags are substantially delayed. This is the most helpful, though limited, step that DOT is taking. Which underscores how minor these new rules really are. And they haven’t even decided yet what constitutes a substantial delay so implementation of this one could take longer.
Of course they could have actually done something helpful to consumers such as revising their rule about one checked bag fee having to apply to an entire customer’s journey, so when customers are flying more than one airline the carriers must split the fee which is why airlines are so often now unwilling to through-check bags on separate tickets forcing passengers to go to baggage claim, wait for bags, re-check them and re-clear security. But that’s not even on the DOT agenda.
DOT is also changing the denominator airlines have to report on from bags lost or delayed per passenger carried to per bags accepted. The goal is to normalize across airlines based on the number of bags they check.
- Require disclosure of ‘display bias’ in airfares, so sites with a relationship to an airline or better financial incentives from one airline will have to disclose if they’re biasing their flight search to that airline.
- Require reporting of how often they mishandle wheelchairs which no doubt is very important to people who travel with wheelchairs.
They haven’t given up on fee disclosure issues yet, they’re just not doing anything about it yet. The challenge which I identified in the regulatory comment I submitted is that you really want online travel agencies competing and innovating to replace the guidance that was lost from a real travel agent when online travel booking went online. And there’s early stages where that’s happening.
You want guidance for the average consumer like, “should I take this connection through a particular city in winter?” But if you require all sites to display the exact same information the exact same way you shut down innovation.
And if you require consumers to sift through information that isn’t relevant to them you make the purchase process more confusing, not less confusing.
This area of regulation contains the greatest risk of creating far more consumer harm than good, so I’m glad that DOT hasn’t yet taken action here — although they’re threatening to. Of course airline fees are already on airline websites, and I’ve yet to find an airline consumer who doesn’t know about checked bag fees (indeed, it’s precisely awareness of these fees that make them so unpopular.)
Up next from DOT: Rules for travel agents that would require them to offer refunds within 24 hours of purchase, the way airlines generally do and to require “all companies that market air transportation” to be subject to the same consumer protection rules. Of course, the devil here is in what constitutes marketing of air transportation, and may even include search displays (like Expert Flyer!) and not just sales.