Friday, 23 October 2009

Federal airline consumer protection agenda

The navigator: Airline passengers' rights overshadowed by tarmac delay fight
(By Christopher Elliott, Washington Post Sunday Travel Section, 25 October 2009):

I think it goes without saying that other, far more important passenger issues are being overlooked. But I'll say it anyway: We're missing a lot. I asked author and consumer advocate Edward Hasbrouck to name his hot-button passenger rights issues, and alas, tarmac delays didn't make the list. What did? Truth in advertising, problems with federal preemption and failure to enforce existing consumer laws. [More background: I've been saying exactly the same things since the turn of the millenium.]

"Airlines routinely engage in practices that would constitute fraud if engaged in by any other business," he told me. For example, they sell tickets on partner airlines, giving the appearance that they are operating a flight, which is referred to as code-sharing. [More background: Airline subsidies, alliances, and codesharing , Comments to the U.S. Department of Transportation re: Disclosure of code-sharing arrangements . Other fraudulent but routine airline practices include include advertising of "half roundtrip" fares and advertising of fares exclusive of "surcharges" and other "fees" (coupled with advertising that implies that "fuel surcharges" are imposed by or paid to the government, rather than the airline).]

Federal preemption of consumer protection laws, which allows airlines to ignore state consumer laws and consumer protection agencies, is another worry. The Airline Deregulation Act of 1978 opened that loophole, "and it has been a disaster for consumers," says Hasbrouck. [More background: Letter to Congress from Attorneys General re: Deceptive Practices by Air Carriers (8 September 2000), Comments of Attorneys General to the DOT re: Airline Price Advertising Rules (13 February 2006), Preemption Is Attorneys General Top Issue For Federal Government (National Association of Attorneys General,12 January 2009)]

The U.S. Transportation Department's lack of involvement in consumer protection also ranks as a favorite, and it's an area of concern for me as a reader advocate. The way Hasbrouck sees it, the department is staffed by devout believers in a hands-off approach toward regulation and, specifically, enforcing consumer protections. "Those attitudes have got to go, which is unlikely to happen unless the people at the DOT get firm new marching orders from their superiors, either from the secretary of transportation or President Obama," he says. [More background: Are incomplete 'prices' in airline advertisements misleading? , Comments to the DOT re: Enforcement of price advertising rules , No change in USA rules for airfare advertising , Decision of the DOT continuing nonenforcement of price advertising rules ]

Update: There's a response from the Department of Transportation in their official blog and a series of repetitive Twitter messages from the Secretary of Transportation, and a follow-up from Chris Elliott (thanks for defending me, Chris!). As I said in a comment in the DOT blog, the DOT appears to have confused a requirement that codeshares be disclosed (which they aren't, in many cases) with a prohibition on codesharing as inherently misleading (and unnecessary for any operational purpose or benefit to travellers). The most egregious error in the DOT response is the claim that "passengers can't even inquire about -- much less buy -- a ticket without first having been told if their flight involves a codeshare and who that codeshare airline partner actually is." In fact, initial displays in response to price comparison inquiries on the leading airline ticket sales Web sites rarely disclose codeshares. More importantly, as I pointed out in comments filed with the DOT in their most recent rulemaking on disclosure of codeshares, "while itineraries usually indicate the operating airline, tickets and boarding passes -- the things travellers are required to have in hand while searching for a flight or gate, even if they don't have a printed itinerary -- do not. Indeed, IATA and airline rules provide no field on a ticket or boarding pass for the designation of the operating airline, and forbid the entry of other information in those fields. A travel agent who wants to indicate on a ticket which airline actually operates a code-share flight is forbidden from doing so by airline ticket issuance rules and procedures." The DOT response ignores the rest of my points and Chis Elliott's, including Federal preemption of state and local consumer protection laws and the attitudes of the DOT toward other consumer protection and enforcement issues. In case it isn't archived permanently, I've copied my complete comments in the DOT blog below:

In response to the statements of mine which were quoted in Christopher Elliott's article, you claim that "passengers can't even inquire about -- much less buy -- a ticket without first having been told if their flight involves a codeshare and who that codeshare airline partner actually is."

In fact, initial displays in response to price comparison inquiries on the leading airline ticket sales Web sites rarely disclose codeshares.

More importantly, as I pointed out in your most recent rulemaking on disclosure of codeshares, "while itineraries usually indicate the operating airline, tickets and boarding passes -- the things travellers are required to have in hand while searching for a flight or gate, even if they don't have a printed itinerary -- do not. Indeed, IATA and airline rules provide no field on a ticket or boarding pass for the designation of the operating airline, and forbid the entry of other information in those fields. A travel agent who wants to indicate on a ticket which airline actually operates a code-share flight is forbidden from doing so by airline ticket issuance rules and procedures."

Most importantly of all in this regard, the DOT has failed to question the clearly and demonstrably false claims by airlines that codesharing is "necessary" for interline sales, ticketing, or operations, when in fact airlines have had interline agreements, procedures, and industry standards in place for decades that permitted all of the features claimed as benefits of codesharing.

Airlines use these false claims about operational needs to justify codesharing, when in fact codesharing is purely a labeling (i.e. advertising and marketing) practice, engaged in purely for marketing and advertising purposes: airlines believe (correctly, I presume, or they wouldn't do it) that they will sell more tickets at higher prices if they label a flight with the name of an airline different from the actual operator. That's fraud, plain and simple, and there is no reason for the DOT to permit it.

Your response ignores the other issues I raised in the interview Christopher quoted from, such as preemption of states' ability to enforce their own consumer protection rules against airlines (which would be a non-issue if the DOT were doing an adequate job of enforcing reasonable norms of truth-in-advertising, and which has been denounced with near-unanimity by state Attorneys General), and the DOT's ongoing policy of non-enforcement of price advertising rules (recall that your most recent rulemaking on this issue proposed to relax those rules even further; when the overwhelming majority of public comments called for stronger enforcement, you backed off only to the extent of keeping the rules nominally in place, but retained the official policy of nonenforcement as long as some of the fees and charges not included in the advertised "price" were disclosed in fine print).

I'm glad to hear that the DOT is "here to help consumers", and looking forward to seeing that demonstrated. As for "what's the most important area of consumer protection", I've posted some of my suggestions in my blog (including links to some of those previously submitted in formal comments to the DOT and supporting links for the my comments quoted in Christopher Elliott's article), and would welcome to an opportunity to be part of further discussions with DOT on this and related questions.

Link | Posted by Edward on Friday, 23 October 2009, 07:23 ( 7:23 AM) | TrackBack (0)
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