September 8 - Industry Analysis: U.S. DOT NPRM Regarding Airline Passenger Protections

Industry Analysis

U.S. DOT NPRM Regarding Airline Passenger Protections

(Docket Number DOT-OST-2014-0056)

The U.S. Department of Transportation (DOT) issued the first of the recent airline passenger protection rules in December 2009 and a second one in April 2011. On May 21, 2014 DOT published a new Notice of Proposed Rulemaking (NPRM) regarding consumer protections. Business Travel Coalition (BTC) has been analyzing that NPRM and has concluded that the long awaited rule on the transparency of ancillary fees (e.g., for checked and carry-on baggage and paid seat assignments) and the transactability of such fees is at significant risk of being delayed. DOT’s ancillary fee proposal is just one of many within this sweeping NPRM. 

After three years of comments, studies and reviews by DOT as well as the Office of Management and Budget the ancillary-fee record is complete. However, the record on the other complex and controversial DOT proposals in the NPRM, such as prescribing detailed customer service standards for large travel agencies, is virtually non-existent. The concern is that the ancillary-fee rule may well become entangled with a raft of knotty issues arising from the other proposals -- consequently pushing a decision on ancillary fees deep into 2015, or even halting the process indefinitely.  For that reason, BTC will urge DOT to move forward promptly with the ancillary fee rule and to take the time necessary to consider the newly-raised and unvetted possible rules on other topics.

The DOT proposal on ancillary services and associated fees within the NPRM is well vetted and thoughtfully presented. Nevertheless, there are gaps in the ancillary fee proposal that could leave consumers at risk of continued unfair and deceptive practices by airlines in the pricing, marketing and selling of those services.

BTC recommends three changes to the ancillary fees proposal in the NPRM that are necessary to restore true transparency and comparison-shopping of the all-in price of air travel alternatives and to put an end to unfair and deceptive airline marketing practices.

1 - Require airlines to allow consumers to pay for their basic ancillary services at the time of ticket purchase through any distribution channels airlines use.

2 - Ensure that airlines share ancillary information with all of the ticket agents they use, including global distribution systems (GDS), to ensure that the information can be broadly, efficiently and effectively disseminated to travel agencies in a usable format. To be sure, requiring airlines to push out this vital price information to travel agencies via the GDSs that issue airlines’ tickets is the only workable solution.

3 - Expand the covered ancillary services to include priority boarding and change/cancelation fees as well as any bundles that include the basic ancillary services under the rule.

More detailed analysis of these recommended changes can be found at HERE.

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