Sunday, 25 August 2019

An "Airline Passengers' Bill Of Rights"?

Christopher Elliott reports today in Forbes on S. 2341, a proposal for an “Airline Passengers’ Bill of Rights” introduced last month by Sen. Richard Blumenthal (D-CT) and four other Senators “If enacted, it would be the most significant consumer protection legislation for air travellers since the enactment of the Airline Deregulation Act of 1978,” Elliott quotes me as saying about this bill.

Here’s more on what S. 2341 would do, where it has problems, and what else is important for airline passengers’ rights:

S. 2341 would be an important step forward, with a few exceptions as discussed below. But it’s important to keep in mind that the oldest and still the most important consumer protection rule applicable to airlines is the requirement that, as common carriers, they sell tickets only in accordance with a published tariff. Common carrier law, especially its tariff requirements, is and should remain the foundation for airline passengers’ rights.

Airlines’ efforts to escape from common carrier requirements, in order to replace tariffs with personalize pricing (so that, for example, an airline that figures out from your posts on Facebook that your mother is dying can charge you $10,000 for a ticket to see her before she dies), are the most significant threat to airline passengers’ rights. Preserving the existing framework of common carrier law, and enforcing its tariff publication and tariff adherence requirements, is more important than any new conumer protection rules for airline passengers.

Christopher Elliott’s article today focuses mostly on the substantive protections in the proposed law, but also notes some of the ways it would improve the structures and procedures for enforcement of existing airline consumrer protection rules, opening up enforcement to state consumer protection agencies and private lawsuits including class actions. Given the lax job that the U.S. Department of Transportation has been doing at enforcing the existing laws, the expansion of enforcement authority may be the most significant part of S. 2341 (and will probably be the portion most strongly opposed by the airline industry).

Here’s what I think is most important in S. 2341, in order of importance, starting with the most important provisions:

  1. Section 211 of the bill, ending preemption of state consumer protection laws as applied to airlines, is huge. This has been the top request of state Attorneys General for many years, especially with respect to airline price advertising that violates state truth-in-advertising laws.

  2. Section 208 creates a private right of action for individuals to challenge unfair and deceptive practices by airlines. This is especially significant when coupled with the ban on mandatory arbitration and class-action waivers in Section 212. The result will be that contingent-fee class action lawyers will challenge many of the violations of air travellers’ rights on which the U.S. Department of Transportation has declined to take action, even when gadflies and watchdogs have made formal complaints.

  3. Section 201 prohibits fees disproportionate to actual costs. That could be significant, but airlines will certainly try — and may well succeed — to game their cost accounting to attribute more than actual costs to these services, to justify high fees.

  4. Section 304 is technical but could prove significant. It appears to be intended to break some of the revolving-door cronyism between the Department of Transportation and airlines, and make enforcement officials behave like the law enforcement officers they are supposed to be, policing the airline industry rather than serving the airline industry as a “partner”.

The questionable provisions in the bill are those in Section 203 on price “transparency”. It’s striking that there is no mention of tariffs or tariff publication in this section, or anywhere in S. 2341. Historically, as noted above, the way that transparency in fares has been guaranteed has been the statutory requirement for airlines as common carriers to sell tickets only at prices prescribed in a published tariff, and to make that tariff publicly available. (That’s what “published” means.)

Section 203 could be interpreted as reducing what transparency is currently required, if it is interpreted as replacing, rather than adding to, existing common carrier tariff adherence and tariff publication requirements. I think the intent to require more airfare transparencyis good, but I would much prefer reinstatement of an explicit tariff publication and tariff adherence rule, and bundling of the provisions in Section 203 into that tariff requirement.

(Note that requiring publication of, and adherence to, a tariff, is not the same thing as the government dictating what prices or rules should be in that tariff. There is no contradiction between deregulation of prices, full freedom of airlines to set their own prices and routes, and the transparency requirement of publication of, and adherence to, a tariff.)

I’m not sure how much chance of passage S. 2341 has, starting with only Democratic Party co-sponsors and with the former owner of a (failed) airline as President. But even rich Republicans who are devout believers in deregulation and a hands-off attitude toward business are often frequent flyers who recognize that airlines are exploiting their oligopoly in ways that are unfair to travellers. Because air travellers are a relatively rich segment of consumers, air travellers’ rights have more support from rich conservatives than most other consumer issues.

Link | Posted by Edward on Sunday, 25 August 2019, 07:37 ( 7:37 AM)
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