Wednesday, 21 February 2018

The Amazing Race 30, Episode 8

Chiang Mai (Thailand) - Hong Kong SAR (China) - San Francisco, CA (USA) - Alameda, CA (USA)

Comments to the U.S. DOT on airline deregulation

I was on an overnight flight to Europe on an airline that doesn't have live TV available as part of its in-flight entertainment when this episode of The Amazing Race 30 was first broadcast. CBS tries to block streaming from its Web site to IP addresses outside the U.S. So I won't be able to watch this episode until I get back to the USA.

But there are more important things for world travellers to think about this week. As this season of "reality" television travel makes its way to the finish line with a final series of long-haul flights, it's a good time for travellers to turn their attention to real-world developments in U.S. government policy that could significantly affect air travel in the future.

As I've noted before, deregulation of private businesses, including airlines, is a high priority for President Trump as a business person and the former owner of a (failed and bankrupt) airline. So is repeal or nonenforcement of antitrust laws.

Whatever you think of deregulation in general, the combination of deregulation, government-tolerated oligopoly, and government subsidies and grants of special privileges is a recipe for windfall profits to the owners of major airlines, and higher air travel costs to taxpayers and consumers alike.

Businesses that accept government subsidies and special privileges must accept the obligation to serve the public, enforced by government oversight. For an airline, like any other transportation company, those obligations take the form of the legal duty to operate as a "common carrier". This is one of the conditions for the issuance of an operating permit.

The Trump Administration signaled its attitude toward airline consumer protection when it aborted its review of airline truth-in-advertsing rules in late 2017. According to a report by Scott McCartney in the Wall Street Journal, "The agency has also signaled to airlines [that] enforcement is changing by inviting suggestions on rules to quash."

Airlines got the message, and seized their next chance to propose a sweeping rollback of Federal regulations protecting air travellers. When the U.S. Department of Transportation (DOT) issued a routine request for comments on its regulatory agenda, airlines and their U.S. and international trade associations responded with an astonishingly brazen "wish list" of consumer protection rules they want repealed, including some of the most basic elements of what it means to be licensed as a common carrier: non-discriminatory adherence to a published tariff of fares offered equally to all would-be passengers:

Numerous individual airlines endorsed these calls for deregulation, and added their own pet peeves at having even minimal obligations to treat consumers and air travellers fairly.

I've joined a coalition of leading airline consumer advocacy oerganizationas and individuals led by Travelers United who submitted a response to the DOT.

Given the length and breadth of the airlines' wish list for "freedom" to defraud, discriminate against, and mistreat travellers, it was impossible for consumer advocates to respond immediately or in detail to all of their proposals. But our submission to the DOT provides an overview of why continued and enhanced Federal regulations, and enforcement of those regulations, are essential to protect consumers and travellers and ensure that airlines continue to justify their use of public resources by serving the public as common carriers.

Some of the airlines' proposals, such as their long-standing desire to replace publicly-disclosed tariffs of ticket prices with personalized pricing, go beyond the DOT's regulatory authority and would require changes by Congress to Federal laws.

As of now, this is all just preliminary jockeying for position. The DOT has not (yet) agreed to include any of the airlines' requests in its regulatory agenda. The real battles will be have to be fought rule by rule in the months and years to come, if and when the DOT opens "rulemaking" proceedings for piecemeal or wholesale repeal of its current, already inadequate and largely unenforced, framework of consumer protection rules. And if the DOT sells out to the airlines, we'll have to take this fight to Congress.

Airline passengers are a relatively wealthy and privileged class of consumers, not the most needy. This isn't, in itself, the most important of current consumer issues. But common carrier laws are some of the oldest and most basic consumer protection laws. Whether they survive the Trump Administration is likely to set an important precedent for the future of consumer protection regulations in other industries.

Link | Posted by Edward on Wednesday, 21 February 2018, 23:59 (11:59 PM) | TrackBack (0)
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