August 16 - Momentum Building for U.S. Passenger Rights Legislation


First “unintended consequence” realized

Airlines need to come on board


August 16, 2009, RADNOR, PA--Business Travel Coalition (BTC) today released the following statement regarding the debate over proposed passenger rights legislation. BTC has not yet officially taken a public position.


STATEMENT

Since 1999, BTC has testified four times in Congress in opposition to passenger rights legislation. In lieu of Congressional intervention in the marketplace, anathema to businesses whose interests BTC represents, BTC called for the voluntary airline Customer Service Plans that went into effect in September 1999. In testimony in March of that year, however, as well as in all follow-on testimony through the years, BTC cautioned that if the airlines do not fix the service and extended ground delay problems, someone will eventually endeavor to do so for them.

From BTC’s 1999 testimony: “Like other industries that have faced the ominous threat of government intervention, airlines should view this legislation as a major warning and move decisively to address Congressional concerns. The industry needs to take immediate steps to head off this and further Congressional action, which will surely follow, if the industry’s problems are not corrected in the near term.”

Some low-cost and major network carriers have taken positive, but limited steps to address the extended ground delay problem. However, ten years later, airline passengers, consumer groups led by FlyersRights.org, travel industry professionals and the organizations that represent them such as the American Society of Travel Agents and the National Business Travel Association have said “game-over, lights-out;” it’s time for legislation and a single industry standard. So have many of our nation’s editorial pages such as The New York Times as well as an increasing number of Members of Congress. It is indeed sad commentary on airline industry leadership that the situation has had to come to this.

As part of its due diligence in determining a position on this controversial issue, BTC on July 26 initiated a survey of travel industry professionals, which is still ongoing. It is abundantly clear from preliminary results that airlines have run out of public-relations runway. Even their own employees, senior executives and former board members support passenger rights legislation, according to the survey and related interviews BTC has been conducting.

It seems that no matter where in the world passenger rights standards are proposed, airlines drag out the dire but fatigued “unintended consequences” warning. For example, a spokesman for the Air Transport Association last week told the San Francisco Chronicle, "I promise you that if a three-hour rule goes into effect, we'll be having this conversation again and talking about the unintended consequences..." And in Europe, the International Air Transport Association and the European Low Fares Airline Association claimed that the now-implemented EU passenger rights regulations would limit consumer choice.

The sky, it turns out, did not fall in Europe. An EU-based travel management company CEO recently told BTC, “The EU regulations on flight cancellations and delays were expected to increase costs without much benefit to passengers. However, it seems not to have had that result. My experience is that vague reasons for cancellations have disappeared, and that the airlines will re-route and provide overnight accommodations when technical reasons prohibit them from flying. Compensation for cancellations is paid without argument.”

Airport Business Magazine Editorial Director John F. Infanger last week likely spoke for many in succinctly stating at the beginning of his blog-post titled The Airlines Talk of ‘Unintended Consequences,’ “… when it comes to the idea of mandating how long passengers can be made to suffer through ground delays at airports. The unintended consequence of them [airlines] continually turning a deaf ear to the issue is likely to be a new DOT reg or federal legislation telling them: Here it is; deal with it.” Infanger ends his post with, “If they want to minimize the unintended consequences, they ought to get in the discussion.”

From BTC’s vantage point, reasonable and experienced airline and travel industry executives have concluded that if airlines cannot solve these customer problems after ten years of Congressional pressure and unfavorable press coverage, then there must be a market failure. That extended ground delays are statistically insignificant is lost on the daughter who had a ninety year old father parked in a hot metal tube for five hours in August. This is first and foremost a health and safety issue. We spend hundreds of millions of dollars endeavoring to incrementally improve upon aircraft accident statistics. Why should passengers expect and accept less with respect to the nearly 500 incidents during the first six months of 2009 in which passengers spent greater than three hours on planes?

Unstoppable momentum is building for passenger rights legislation. Airlines’ loss of control of this debate is the first but perhaps not the last “unintended consequence” resulting from stonewalling for so long on this important consumer issue. They have a closing window-of-opportunity to humble themselves and constructively engage the proponents of passenger rights legislation. The Air Transport Association and its member airlines have been invited to participate in a September 22 Passenger Rights Stakeholder Hearing in Washington, DC (http://stakeholderhearing.eventbrite.com). Perhaps they will get the message this time and show up to find workable solutions for all stakeholders.

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