8 Things Congress Will Change This Week About Air Travel

In a move that should surprise absolutely no one the Fair Fees Act isn’t a part of FAA reauthorization that will be voted on this week.

Banning airlines from charging fees for things like baggage or changes over cost was a dumb idea, but that’s not why it’s dropped of course. Republicans control Congress and the Executive Branch.

However it’s an anti-consumer idea masquerading as pro-consumer.

  • Ultra low cost carriers are more reliant on fees than the largest airlines. They’re the ones hurt most, and their business model has been driving down airfares that all the airlines charge. Eliminating their business model isn’t good for the airfares we all pay.

  • You don’t just get to eliminate fees and save money, assume airlines will just take less in exchange for transportation. There will need to be higher fares, where those aren’t supported there would be fewer flights.

Airlines are one of the businesses that annoy their customers the most. And airlines are already one of the most heavily regulated industries in the country. Deregulation largely meant the government no longer decides who flies where and at what price. And airlines got their own regulatory agency in exchange, most businesses just follow Federal Trade Commission rules rather than having micro-level decisions dictated and reviewed by the Department of Transportation.

Indeed much of air travel is dictated or carried out directly by governments. Nearly all commercial airports in the U.S. are owned by governments (and in many jurisdictions governments don’t even compete with each other, with airports in the same region controlled by the same agency). Airport security is carried out by government, rather than government setting standards and reviewing performance (a conflict of interest, regulating themselves, that leads to worse performance). Air traffic is run by the government, again rather than just setting standards and reviewing for safety.

There’s less competition in business models, little space for new market entrants, and so airlines are very similar. We need government to stop protecting airlines, and less regulatory capture by airlines, if we want more consumer-focused businesses.

Meanwhile the FAA reauthorization bill includes a number of provisions other than ‘Fair Fees’ that are worth noting.

  1. A legal ban on smoking e-cigarettes and making cell phone calls inflight, both of which already are not permitted.

  2. Ban on placing live animals in overhead bins (United, cough, United)

  3. Requirement for airlines to permit passengers with small children to check strollers

  4. A demand that the Department of Transportation determine whether it’s unfair or deceptive for airlines to declare a flight delay or cancellation is due to weather when there are other causes besides weather.

  5. Granting DOT authority to require airlines to allow early boarding for pregnant women.

  6. Loosen rules for supersonic travel. While there remain technical challenges to economical engines, there are new versions of the Concorde on the horizon

  7. Greater penalties for interfering with flight attendants and pilots. As though you didn’t already have to respect their authoritah. Expect more outsourcing of airline customer service to law enforcement.

  8. And the Space Force cometh,

    It also directs the FAA to establish an Office of Spaceports to provide guidance, support licensing for spaceports, and promote infrastructure improvements for future space travel.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. The issue with regulating fees is not if the airlines should be able to, its if it should be make completely obvious and not hidden in the price of travel. Surely you understand that LCC’s unbundling of every part of airfare is what started this (and good for that, I am not complaining), but the government is trying to make it so that someone can compare different products fairly and easily, and allowing companies to just charge any fee and define things differently is what makes for chaos. There is a reason why we regulate things like food, clean air, etc, and its so that we all have a standard that we can expect, and we know what it is that we are eating/breathing/etc. These rules help us achieve that.

  2. @joelfreak that is not at all what the ‘fair fees’ legislation was proposing, the language specifically limited fees to actual cost.

    we’re getting near the point where we’ll be able to compare fees and understand total trip cost easily. several online services are driving us there WHICH IS WHY AMERICAN BROUGHT BACK A FULL SIZED CARRY ON FOR BASIC ECONOMY because the ability of consumers to compare services made AA look more expensive than Delta (which it was) for the same service bundle.

    regulating exactly what can be charged, how much, and what specific things are included in a price gets in the way of this process, DOT proposed rules that the Obama administration abandoned would have required customers to be shown the exact fees that the agency thought important, not what was most relevant to each customer — making it harder to sort through more information rather than developing services that help consumers understand what matters to them.

    of course airlines are fighting this trend tooth and nail, they don’t want online services to even have ACCESS to this information (or at least without paying a tax to them).

  3. Over regulation has caused this mess to begin with. Now some in the government want to pass more regulation to fix problems that they caused? It’s another example of the endless insanity that is masked as compassion for the people. Even worse is the level at which, this deception, is gobbled up by seemingly intelligent people.

  4. They should subject ancillary fees(espicalially carrier imposed surcharges)to the same excise taxes as airline tickets. Same thing for hotels and destination fees. Tax avoidance is the main reason for the Byzantine fee structure.

  5. The spaceports provision has absolutely nothing to do with the #SpaceForce. Quit making stuff up.

    The FAA has had a commercial spaceflight division for a long time (decades) and they’ve been licensing commercial spaceports for quite a while. (this is the internet: Google “FAA-AST”) That provision is nothing more than a minor organizational change.

  6. Gary, you missed the important rules:
    “…would require the FAA to set minimum dimensions for passenger seats — including legroom and width — and prohibits airlines from involuntarily removing passengers from flights after they’ve cleared the boarding gate.”

  7. If I read this correctly …The Fair Fees act is not part of the FAA reorganization. This being the case, I am I to assume the Fair Fees Act will die in the halls of Congress?

  8. Gary wrote: “Nearly all commercial airports in the U.S. are owned by governments (and in many jurisdictions governments don’t even compete with each other, with airports in the same region controlled by the same agency).”

    Actually:

    What is the ownership of airports? Airports are usually owned by municipal corporations. Municipal corporations are created by specific statute, ie, a municipality/state/federal law. Their purpose is defined in the statutes. By comparison, non-municipal corporations (henceforth referred to as corporations) are created by incorporation laws in each State. However, for the most part, States pass the Uniform Commercial Code (UCC), so all corporations in the USA are governed by similar laws.

    Are municipal corporations owned by the government that creates them? That is an interesting question. Municipal corporations are considered separate legal entities. The managers of a municipal corporation are required to operate in accordance with the specific statute that created them. Municipal corporations typically do not have taxing authority. They raise money through operations and through issuing municipal debt. They have a legal obligation to be truthful in the representations in the official statements of the debt issuance. The municipality that created them, does not share financial statements, and there is no pooling of money. They often get a payment in lieu of taxes. The answer is somewhat muddy.

    Does the underlying municipality control the municipal corporation? Usually the board of directors is appointed through some sort of political process (ie, mayor/governor with some input from the legislature). However, the municipal corporation is still only allowed legally to perform actions approved in the statute. Of course, the municipality could change the statute. For example, an airport authority is probably allowed to perform functions related to airport operations (concessions, parking, transport within the airport). They could not decide to start building roads in their favorite politician’s district or something like that. So the answer is kind of.

    Do airports compete with each other? Gary was probably thinking about agencies like the Port Authority of New York and New Jersey (PA). When I was taking municipal finance, I decided to write a report about PA. Seriously, after reading the official statements, annual reports, and rating agency reports of the PA, the operations were as clear as mud. The PA is way too big, it is oligopolistic, and not too transparent. Should totally be broken up. Unfortunately, since NY/NJ are the crony capital states, breaking up the PA is not likely in my lifetime. However, when I have looked at smaller airports’ official statements, the story is different. Their official statements are easy to understand. To be honest, the finances of many airports are not on the most solid ground. They face competition from other airports. They are captive to the airlines, who might move to other airports. They are captive to local demographics and business environment. It is difficult for them find merchants that can make a profit in their airport and are willing to pay adequate rent. Even a large airport like ATL would be seriously hurt by their main airline deciding to shift their connecting traffic to another airport. I would not put my money in airport bonds. No way. No how.

    How do you find out about airports? For public corporations, one looks at the 10K/annual report. However, airport annual reports for an airport is usually not that informative. They just disclose annual financials and that is it. The best place is the official statement of the airports’ most recent bond issuance. They are on the airports website. The official statements have sections on legal status of the airport, competition, demographics of the served area, types of revenue streams and so forth.

  9. Gary: I just realized that I did not conclude above. I have 4 conclusions:
    (1) Airports authorities are businesses, not government.
    (2) They have to make enough money to pay back REVENUE bond investors and capital spending. Sometimes that is really dicey.
    (3) I think you should do more due diligence on airports by reading municipal bond official statements. Or at least skimming them.
    (4) If you did item (3), I think you would narrow your statements about airports in general. If you wrote that the Port Authority of New York and New Jersey has undue market power, I would be 100% on board.

  10. …several online services are driving us there WHICH IS WHY AMERICAN BROUGHT BACK A FULL SIZED CARRY ON FOR BASIC ECONOMY…

    Nah. A ban on overhead bin space for basic economy was nixed because it couldn’t be enforced easily. How is a FA supposed to be nannying people boarding as basic economy when they’re sitting with the other economy customers to make sure they don’t have overhead bags? How much time is used confronting stupid economy basic customers regarding overhead luggage?

  11. Michael Boyd needs to call his doctor. Because I’m sure he’s had a woody for over 4 hours re: Boom technologies, as I bet he’s an investor.

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