Tuesday, 12 October 2004

Senate votes to reassure, but not protect, holders of tickets on bankrupt airlines

In addition to the provisions for identification, surveillance, and control of travellers which I discussed in an earlier article, the version of the the National Intelligence Reform Act of 2004 (S. 2845) adopted by the Senate last week includes an amendment introduced by Sen. Ron Wyden of Oregon that would extend for another year, though 18 November 2005, the present law requiring other USA-based airlines flying the exact same route (if there are any, which on many routes there aren’t) to transport holders of tickets on airlines that cease service (if they can prove they had tickets, which most holders of electronic tickets won’t be able to do, since e-mail confirmations are trivially easy to forge, and not proof of anything), if they have unsold seats available (which they might not have for many days or in many cases weeks if a major airline shuts down), for a fee.

As I’ve been explaining in my FAQ about Airline Bankruptcies (as quoted at some length last Sunday in the New York Times travel section) and elsewhere, this law was enacted in response to lobbying by the air travel industry after 11 September 2001, in order to restore confidence so that people would be willing to resume buying tickets in spite of (well-founded, as it has turned out) fears that airlines might go bankrupt. The purpose of the law was to reassure consumers, not to protect them, and especially not to require airlines to do anything that would have any significant cost or risk.

I think this law serves more to give travellers a false sense of security than to give them any meaningful protection. Rather than being extended, it should be allowed to expire — and replaced with a requirement that airlines give ticket purchasers, who are in effect making interest-free loans to the airlines, the same security interest in their planes and other assets as is given to other lenders .

Link | Posted by Edward on Tuesday, 12 October 2004, 16:35 ( 4:35 PM)
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