June 28 - An Orwellian Airline Proposal


The Honorable Senator John Thune

511 Dirksen Senate Office Building 

Washington, DC 20510


The Honorable Bill Nelson

716 Senate Hart Office Building

Washington, DC 20510


RE: An Orwellian Airline Proposal

Dear Chairman Thune and Ranking Member Nelson,

A most unworkable FAA reauthorization amendment was approved yesterday during the House markup requiring large online and traditional travel agents to adopt minimum customer service standards. The amendment was offered by Rep. Lipinski but opposed by Chairman Shuster because a rulemaking covering this area already exists at the U.S. DOT. However, the real problem with this proposal, a version of which will likely be introduced during the Senate markup, was deceptively designed by major network airlines to disadvantage their largest direct competitors in the distribution marketplace, ticket agents.

The amendment is one hundred percent designed to set those large travel agents up for failure. Agents do not control airline information and/or have the capabilities to (1) offer refunds for tickets or unused ancillary services, (2) hold ticket reservations without payment for 24 hours, (3) disclose all the airlines’ cancellation policies on a given route along with their seating configurations, (4) notify customers of itinerary changes and (5) respond to customer complaints related to airline service.

When airlines propose legislation the stated purpose of which is to ensure “a consistent level of consumer protection,” you know George Orwell is rolling in his grave. Of concern to airlines is that paused U.S. DOT rulemakings could finally require airlines to provide product and price information for tickets and ancillary services to travel agents and metasearch companies so that consumers could once again efficiently compare travel options. These airlines have fought such pro consumer transparency at the U.S. DOT, in federal district court and in Congress for years.

Why Would Airlines Want To Set Agents Up For Failure And Why Just Large Travel Agents?

Agents cannot comply with the requirements of this legislation. If enacted, it is so obvious that smaller agents’ costs would soar, and along with fines, too many would be forced out of business and, as such, that would sink the proposal politically. Likewise, the largest agents would not be able to comply. In addition to harmfully increasing the costs of their largest direct competitors in travel distribution, the airlines would see themselves is a position to argue that the agents’ inability to “adopt minimum customer service standards” and “protect” consumers represents ironclad proof that airlines should not be required to provide to agents the product and pricing information being contemplated in the paused U.S. DOT rulemaking. 

The near-term objective for those network airlines is to keep information out of the hands of travel agents making comparison-shopping exceedingly difficult and thus increasing the prices consumers pay for air transportation. However, the long game is to disintermediate all travel agents and drive consumers to airline websites where there is no comparison shopping among airline competitors available and where consumers will pay supra premium prices. 

Beyond the airlines’ motivations, the amendment will not serve any public good, will require the U.S. DOT to initiate a new rulemaking when a pending rulemaking on this topic already exists and put large ticket agents, with whom a significant percentage of flights are booked, in a position where compliance is impossible. I urge you to see this Orwellian airline proposal for what it is and reject it.

Sincerely,


Kevin Mitchell

Chairman

Business Travel Coalition

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