Those in the airline industry have been waiting for the Department of Transportation’s (DOT) latest proposed rulemaking with a mix of fear and dread. After all, the DOT has, of late, spewed forth garbage rules that are costly and not actually helpful. But, as I discussed yesterday, when the DOT put out its latest proposal, something strange happened… it wasn’t all that bad. In fact, there’s even a lot to like in here. I can’t believe I’m saying that. We already talked about the fee disclosure issue yesterday, so today let’s focus on the rest. First up is my favorite issue – improving airline reporting metrics.
Make More Airlines Report Their Performance Information, And Make the Data WAY More Useful
This is the best change of the bunch without question. Today, DOT requires airlines to report their on time performance, their mishandled bags rates, etc. But DOT doesn’t actually mandate this for all airlines, and the way it’s presented isn’t always useful. Now, there are three changes being proposed which would make it much better.
- More Airlines Will Have to Report – Today, there’s an arbitrary number out there saying that airlines with more than 1 percent of total domestic revenue have to report. That means smaller airlines don’t have to do it and that leaves an incomplete picture. The proposal now is to lower the threshold to 0.5 percent of revenue, and that would cover 98 percent of traffic in the US. They’re debating exactly how to expand it, so the metric could vary, but the idea is to make all the players report except for the tiniest of tiny.
- Airlines Will Have To Report Codeshare Partners – One of the biggest problems with the data today is that it is all reported by operating airline. For example, half of United’s flights are on regional partners, but those wouldn’t fall under United’s reporting today. And with regional airlines flying for many partners, you can’t really understand which airline to book if you’d concerned about on time performance. That makes United’s, and everyone else’s, data pretty worthless. Now the rule would require on time performance mishandled bags, and oversales to to be reported by marketing carrier. This is only for domestic, so international codeshares aren’t an issue, but it’s a huge improvement. I would still hope they would carve out things that aren’t a true regional relationship, In other words, I don’t want American to report Alaska’s stuff even though they codeshare. That just muddies the water.
- Change Baggage Reporting Rules – Right now, lost bags are reported as a fraction of total boardings, but what good is that? What I really care about is how many bags are lost as a fraction of the total bags checked. That is also being proposed here.
Make Sure Metasearch Sites and Global Distribution Systems Can’t Screw You Around
This is a simple definition change, but it makes sense. Many of the rules that are out there refer to “ticket agents” but that term was formed before the day of the aggregator dawned. Metasearch sites like Kayak, Routehappy, or Hipmunk aren’t technically ticket agents and neither are Global Distribution Systems (GDS) like Sabre and Apollo because they aren’t doing the ticketing. But they’re still displaying flights and fares and acting very similarly. So now, DOT is proposing that they specifically be included under the definition so that they can’t get around the same disclosure rules that apply to online or offline travel agents. That seems like a good idea to me.
Make Large Ticket Agents Abide By Airline Customer Service Rules
Most tickets bought through agencies (online and offline) are from big agencies like Amex or Expedia. So DOT is saying that any company with more than $100 million in revenue annually that sells tickets will have to behave like an airline. They must hold tickets or allow them to be canceled within 24 hours of purchase and they have to disclose that policy. They need to provide prompt refunds, within a week on credit cards. They have to disclose penalties after ticketing, and they have to disclose changes to itineraries in a timely manner. And yes, they have to respond to consumer complaints.
This is the kind of thing we do every day in our business at Cranky Concierge, and it’s sad to think that larger companies don’t do things this basic. But they should certainly be required to do it if the airlines are as well.
Prevent Bias in Fare Display
When you do a search on a website, do you think a lot about what order the results are delivered in? Probably not. Sure, you can change a sort, but you generally assume it’s initially given to you sorted by price, schedule, or a mix of both. But did you know that there could be bias in those results that has nothing to do with what’s good for the customer?
GDSs have been notorious for using bias as a contract negotiation tool. When American and Sabre got into a fight, Sabre first pushed American’s results down the list and then removed them entirely. Travelers looking for the best flights had no idea. Now, this would be made illegal. At the very least, it would require the site to disclose if a bias is being implemented. And if there is a bias disclosed, then the sites would have to make clear if they’re getting incentive payments that would influence it. There’s a separate bit here that would also require ticket agents to disclose if there’s an airline flying a route that’s not being shown – go ahead and call that the “Southwest” rule.
This all makes sense to me. If people are trusting websites to give them good information, they should at least know if there’s something shady going on behind the scenes. Though admittedly that last point is tough. It’s hard to keep track of which airlines are flying which routes, especially in the ultra low cost space where it can change so often and they don’t publicly file the schedules.
Dealing with the Post-Purchase Price Increase Problem
Awhile back, DOT made it so that airlines couldn’t increase prices after a ticket was purchased. That created a murky situation, so they’re trying to clean this up now. In relation to fees, baggage fees can’t increase post-purchase but that’s it. That means seat assignment fees can change, and so can other random fee. That’s fine.
And they deal with mistake fares, which I think is pretty interesting. DOT defends the policy of requiring airlines to honor mistake fares, but also calls out “bad actors” who are buying mistake fares in “bad faith.” I found that pretty interesting. Not sure how they’ll deal with it though.
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That’s about it for this round. What do you think?
