A Look at the New DOT Rules That Foreign Airlines Hate

Last week, the Department of Transportation (DOT) rolled out a bunch of new rules the are supposed to make the passenger flying experience better. On many of these, it seems downright silly that the government is involved, but there are are a few kernels of good in there surrounded by a sea of . . . well, not much useful at all. In fact, I would say that unless you’re a foreign airline, there’s actually very little that’s bad in here in general, though some of the so-called “passenger rights advocates” are probably steaming about some of the things that were left out. (You can read the final rule here.)

Let’s go through the changes. All of these go into effect in mid-August with the exception of the advertising rules which don’t go live until October.

Tarmac Delay Rules and Customer Service Plans Go International
When I said that there wasn’t much bad in here, I was mostly referring to the position of domestic airlines. For foreign airlines, this is a nightmare, and in fact, many contend that it’s not legal. The DOT shrugs it off, but this is likely to go to court since the foreign airlines don’t believe the US has the right to impose these rules upon them. Assuming it stands, here’s what happens.

Going forward, the long ground delay rules will now apply to foreign carriers that have the right to pick up American DOT Channels He-Man, Overregulatespassengers on US soil. The only difference versus the rule as we know it today for US airlines? Foreign flights can sit on the ground for four hours before being penalized instead of the three in the current rule. Of course, most of the ones that have gone this long are usually related to customs and immigration problems. Coordination between the airlines and customs/immigration is now required as part of this rule.

Some of these rule changes really don’t matter at all. The ground delay rule, for example, will now also apply to all commercial airports in the US, but that doesn’t really matter. The problems are at the big airports where the rule was already in effect anyway. And airlines are now required to announce if passengers can get off the plane if they’re at the gate. Um, ok.

One thing that seemed to be a victory for passenger rights folks was the requirement that the long ground delay plan offered by the marketing airline would apply and not that of the operating airline. So if you bought a ticket on US Airways as a codeshare on Continental, then you’d now be subject to the US Airways policy. This, of course, is completely insane. Can you imagine if you have a passenger from every single Star Alliance airline codesharing on a United flight? There is no way that United could obey all of the different plans. So the DOT gave them an out and completely gutted the rule change. If the marketing airline says in the contract of carriage that the rule of the operating airline applies, then that’s just fine. So nothing will change here.

I do like the rule that requires update notifications on delays every 30 minutes. I mean, it’s a worthless rule since most airlines have a policy of updating more frequently than that anyway. If it’s not always obeyed now, this probably won’t change anything. You can’t make every single front line employee obey this very easily.

We also are now going to see foreign airlines being forced to adopt the customer service plans that US airlines already have. You know these (here’s Delta’s just in case). These are the rules that allow you to either cancel without a fee within 24 hour of purchase or hold it for 24 hours before purchase (now required only if booked more than a week in advance), they require prompt responses for complaints, etc. Now foreign airlines are going to have to develop these as well. I can’t wait to see how the DOT enforces this with some of these airlines. I do, however, like that these along with the contracts of carriage must be posted on the foreign airline websites.

One thing that the passenger rights people really wanted was a requirement to have this customer service plan put into the contract of carriage. The DOT denied that.

The Bag Fee Refund Rule Has No Teeth
We talked about the proposal to require airlines to refund bag fees if bags are lost or delayed here last week. Now the rule is out and it’s not nearly what it could have been. Bag fees now must be refunded only if your bag is lost. In other words, the rule suggests that you are paying the airline to deliver your bags, not deliver them on time. So if the bag is never delivered, you get your money back. That’s it.

Denied Boarding Compensation Goes Way Up
I wrote about this over on CNN this week, but in short, getting bumped gets more lucrative. Instead of getting 100 to 200 percent of your ticket value up to $800 you’ll now get from 200 to 400 percent of your ticket value up to $1300. You can see more about why this is good and bad over at CNN.

Full-Fare Advertising Now Required
One of the bigger changes is that advertisements now must include the full fare amount, including all government taxes and fees. Previously, airlines could advertise excluding some of the additional government charges as long as it was in the mice type at the bottom. Though requiring taxes to be included in fare ads is not something you see in many other industries, this one isn’t a bad rule. If it does actually apply to fare displays on websites, then it’s a good thing. There’s nothing I like less than seeing a fare in the booking process and then having a bunch of taxes and fees added on at the end.

Tightening Rules on Fees
One of the things that the DOT tried to do here is create some rules around how fees should be treated. Here’s a run down of what will change.

  • Ancillary services that are added in at the end before purchase must be “opt in” and not “opt out.” In other words, if you see that box asking if you want travel insurance, you have to physically click on it or it won’t be included automatically as is sometimes done today.
  • If bag fees change, then the change must be displayed on the homepage in some fashion for three months. In fact, there needs to be a permanent link on the homepage with a link to a page that shows all fees in general.
  • All bag allowances must be included on the e-ticket receipt for every airline including the fee structure for bags. And if you’re traveling on a codeshare, then it must be noted which airline policy applies to the entire journey. (It can’t be multiple policies.)
  • If a flight is canceled, the airline must refund fees unless the passenger is able to get that same service on a later flight. In other words, if you check a bag and are canceled, but your bags go on your rebooked flight, then no refund is needed. But if you paid for premium economy and then you get kicked back to economy on your new flight, that upgrade charge will be refunded.

Allegiant Loses the Flexible Fare Battle
You might remember Allegiant’s spirited defense of the right to be able to increase fares after a purchase is made if the passenger agrees in advance. I saw nothing wrong with that plan, but that’s not happening. Post-purchase fare increases are now banned.

DOT Doesn’t Get Involved in the GDS Battle
Yesterday, I wrote about the escalating battle between the airlines and the global distribution systems (GDSs). The DOT could have inserted itself into that battle by requiring that airlines disclose all their fee information in a standardized format to the GDSs, but it didn’t. It is not going to require airlines to disclose fees in that way to the GDSs.

Overall, many of these changes are minor and won’t have a big impact. There is some good in here too, but ultimately, I think it’s more for show than anything else. The DOT wants to look like it’s really working hard here to be on the side of the passenger. It looks like it is, but most of these changes are pretty weak at best . . . unless you’re a foreign airline.

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