Tue, Jan 31, 2012
Airline Industry Pioneer Weighs In With The Business Travel
The Business Travel Coalition (BTC) has transmitted a letter
signed by some 150 organizations to Congressional conference
committee members negotiating a long-term reauthorization of the
FAA. Signatories urged conferees to include language that will
prevent some airlines from continuing to violate Section 41712 of
the U.S. Federal Aviation Act.
Specifically, these industry organizations ask that Congress
direct the U.S. DOT to require airlines to disclose optional fee
information, such as checked baggage charges, and at-airport
ticketing fees, in the same electronic and transactable formats
used to publish airfares themselves within 180 days.
Signatories to the letter expressed to conferees that Section 41712
prohibits “unfair or deceptive” practices in the sale
of air transportation by airlines and ticket agents. The continuing
failure of airlines to share information about their optional fees
with ticket agents violates Section 41712 by making it impossible
for consumers to efficiently compare air transportation costs among
New consumer-protection rules introduced by DOT last week require
airlines to disclose on their websites if there will be additional
baggage fees and where consumers can go to find them. This is a
positive step but the rule does little to facilitate
comparison-shopping, and applies to just one of many optional fees.
Consumers continue to pay supra premium prices -- billions of
dollars in fees -- for optional services because the inability to
efficiently compare the total cost of air travel (base airfares and
fees) on an apples-to-apples basis across multiple airlines
guarantees that these prices go undisciplined by the marketplace.
This greatly frustrates individual consumers as well as major
corporations that purchase millions of dollars in air
In a news release, Robert Crandall, retired Chairman of American
Airlines, said he thinks the airlines will serve both themselves
and consumers by offering comprehensive information to customers.
“As we all know,” Mr. Crandall said, “consumers
do not hold the airline industry in high regard, despite the
extraordinary job the airlines have done of providing the public
with safe and affordably priced transportation services. I
don’t know why the airlines seem so opposed to disclosing
information on the websites consumers use, since consumers will
find out the real cost of travel when they actually fly, and I
should think that taking away a source of aggravation for their
customers would be high on the industry’s self help list. Why
make your customers angry when you have nothing to
BTC believes that given the rapidly expanding list of optional
services, airlines should indeed want to benefit from accelerated
consumer acceptance of optional fees and sales revenues possible
only through traditional brick-and-mortar and online travel agency
points-of-sale as well as through corporate online booking tools
utilized by millions of business travelers. However, for three and
one-half years, despite the substantial purchasing power of major
corporations, and their continuing calls for fee transparency,
airlines have refused to provide optional fee information.
BTC Chairman Kevin Mitchell stated, “Unfortunately, normal
competitive forces will not alleviate this problem. If one airline
were to include comprehensive information on optional fees, that
carrier would be disadvantaged because the cost of transportation
on that carrier would appear – to the unaware consumer
– to be higher than the cost of travel on its competitors.
The federal government can uniquely solve this problem for airlines
unable to act independently and for consumers being financially
Unlike nearly all other industries, consumers have no legal rights
under state consumer-protection laws to seek redress for unfair and
deceptive treatment because of federal preemption -- a doctrine
airlines created and fight hammer-and-tongs to defend and expand.
What’s more, under Section 41712 consumers do not have a
right to sue for bad service. DOT, empowered by Congress, is the
sole guarantor of consumer-protection for air travelers. Congress
should direct DOT to require this optional fee information of
airlines within 180 days of FAA reauthorization.
Conference committee members include House Transportation and
Infrastructure Committee Chairman John Mica (R-FL), Ranking Member
Nick J. Rahall, II (D-WV), Aviation Subcommittee Chairman Thomas E.
Petri (R-WI), Ranking Member Jerry F. Costello (D-IL) as well as
Senate Committee on Commerce, Science, and Transportation Chairman
Jay Rockefeller (D-WV), Ranking Member Kay Bailey Hutchison (R-TX),
Subcommittee on Aviation Operations, Safety, and Security Chairman
Maria Cantwell (D-WA) and Ranking Member John Thune (R-SD).
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