It seems like every week, as of late, there’s a new proposed bill coming out of Congress that tries to slap over-reaching regulations on the airlines. In general it’s not a surprise, since that’s pretty much what Congress does. But it still makes one wonder why the airlines are such a regular target. There’s a simple answer and a not so simple one.
The basic rationale is pretty straightforward. Congress is in the middle of the painful process to try to reauthorize the Federal Aviation Administration (FAA), and that means it’s a free-for-all as our elected representatives try to slap a variety of riders on to the primary bill. These efforts all have silly little acronyms to get you to remember them. First there was the SEAT Act to regulate seat size. This was proposed by Rep Steve Cohen (D-TN) and shot down. But it wasn’t down long. Rep Adam Kinzinger (R-TN) signed on as a sponsor giving the bill bipartisan support. Soon after, Sen Chuck Schumer (D-NY) brought this idea over into the Senate. Sen Richard Blumenthal (D-CT) is onboard as well. But that’s not all he supports.
Sen Blumenthal has now buddied up with Sen Ed Markey (D-MA) to try to attach the FAIR Fees Act which would regulate the cost of airline fees to the consumer. It would require that all airline fees (baggage, change, etc) be “reasonable and proportional to the costs of the serves [sic] provided.”
My assumption is that this is all just grandstanding, and we won’t see these in the final bill. (If that’s not the case, then the industry lobbying group A4A has really screwed up badly.) But to assume that means these efforts can be ignored is a mistake. The real issue here is… why is the airline industry being treated in a very different fashion than any other industry?
This is an industry that had pricing deregulated in the 1970s, but this FAIR Fees Act is unquestionably an effort to re-regulate pricing. In a deregulated market, companies get to set their own pricing, but there’s something about the airline industry that causes people to think they have a right to meddle in the free market. Ticketmaster is hated as well, but I don’t believe there are any federal laws regulating ticket service fees. I’ve also yet to see anyone try to regulate the cost of a Coke in the minibar at a hotel. These may not be identical situations, but they’re certainly similar. Yet airlines are always the whipping boys. It still bothers me that mandatory surcharges were forced into the advertised airline price years ago yet hotels can still get away with increasingly egregious resort fees. There is a double standard.
I called Sen Blumenthal’s office for comment on why he viewed the airline industry as being different, and I was told to email the press office. I sent notes to both Sens Blumenthal and Markey, but I received no reply. I guess they don’t have a good answer.
The SEAT Act is another odd piece of attempted regulation. Has anyone tried to regulate legroom on the subway or personal space on a ferry? The bill sponsors try to hide behind the safety veil, but that’s clearly not the intent. Setting minimum seat pitch requirements is arbitrary. Let safety regulators figure out what’s safe and what’s not through specific evacuation tests. And why is safety so much more important on airplanes? It’s already the safest mode of transport. We can’t even get anyone to require seat belts on a school bus, but somehow minimum seat pitch is needed on an airplane.
There’s clearly a problem when we see repeated attempts to do something that really shouldn’t be happening. And as is often the case with the airline industry, it’s probably self-inflicted (to some extent). Salesforce.com brought me out to Dallas to speak to a group of people from American a couple weeks ago, and I touched on this in my talk. While airlines may put out policies and strategies that benefit customers, they never actually create these things FOR customers. When an industry isn’t customer-focused, there’s a natural distrust. And that is one big reason why I think we see so much silly attempted regulation.
Just think about airline fees. Today, we can look at it and objectively say that having ancillary fees enables base fares to be lower than they otherwise would be. Customers get to choose what they want and build a product that fits their needs. It sounds very customer-friendly, and frankly, it is. But that’s not why fees came into being.
Airlines pulled off free meals and eventually started selling them as a cost reduction strategy. They started charging for extra legroom as an effort to monetize a previously-failed effort to get people to pay higher fares. (Yep, that’s you, United, with Economy Plus.) And bag fees were a pure and simple money grab. As airlines lost billions thanks to rapidly spiking fuel, they did anything they could to keep afloat. There was no customer strategy. The strategy was invented after the fact. I like the a la carte strategy, and I like rebundling and packaging even more. But I don’t like how this stuff rolled out in the first place.
Now that airlines are making decent profits and reinvesting heavily in the business, there is hope for change. I’m going to keep my fingers crossed that this means they can actually put forward strategies that are created with the customer in mind instead of just adapting strategies to the customer after the fact. (That means you can’t just copy everything Delta does, United.) Once the airlines start doing a better job of acting that way, then we’ll probably see fewer stupid efforts at re-regulating.
[Original shoebox image via Shutterstock]
74 comments on “Why Does Congress Keep Trying to Over-Regulate Airlines?”
Maybe slightly off-topic, but I just can’t take more of the seat pitch hype!
The seat pitch is the wrong metric to measure the leg-room. You yourself have stated that repeatedly on this blog. The seat architecture varies between brands and models. Therefor a comparison of the seat pitch between brands and/or models is actually like comparing apples to oranges when it comes to the effective leg room.
A much better and much more realistic metric would be the distance between the lumbar support on the front of a seat and the back of the seat in front of it, at a height of 10-15 cm above the sitting surface.
I know that my knees end at x cm from the backrest of a seat, and the seat pitch (a.k.a. the distance between a point on my seat and the same point on the seat in front of mine) does not tell me if I will have bashed into the seat in front of me or not.
Mario – Amen. This is an area where I’d say the industry lobbying group A4A has completely fallen down. If anyone can get a new standard out, it should be that group. And the new standard would be highly beneficial to airlines because newer seats have less pitch without impacting personal space to the same extent. Seat pitch is a bad measure.
I would also like to add at this point that while seat pitch would not be an exact representation of “legroom”, it would give a fair idea about “seatroom”.
I would disagree with you Brett over the need for this regulation.
Transport is of three types, with one of those types being air. In the US, there are 4 major airlines left. That means that at some point, a person will not exactly have the choice of which airline to fly, which has given the airlines an opportunity to collude and reduce the seat pitch and dimensions. (In India, the railways are heavily regulated by the government to ensure that the customer is not exploited, rail travel being the main mode of transportation in India) Although these changes were largely introduced when airlines were in some serious shit, it is unlikely that the airlines would increase the seat pitch because they are making higher profits now, being entities in the free market as you so rightly pointed out.
Secondly, a person usually compares the price he sees on an airlines website before surcharges such as fuel fees etc. are added. This means that if two different airlines have different modes of calculating their very-transparent fees, then the total cost of a seat which has a lower base rate might be higher than that which has a higher base rate. This is nothing short of misrepresentation, and hinders the choices that people make or would have made.
Thirdly, while lesser seatroom might be “safe”, it might also mean an increased risk of my laptop screen getting smashed when the person in front of me violently reclines, more fights over legroom and the right to recline, increased frustration, expedited medical bills and a lot more that would essentially cost the customer more than a 1dollar or 2dollar (or maybe even 5 dollar) increase in his airline cost.
Devarsh – Thanks for the thoughtful comment. I don’t think we’re likely to convince each other to change our positions on this, but hey, I’ll try.
I’d be more comfortable with the idea of re-regulation in full than I am with this partial hacking. I don’t think either is good for the traveler, but the argument about total re-regulation is easier for me to accept. If something is so important that it’s for the good of the country, then go ahead and re-regulate. What will happen is that fares will get more expensive OR there will need to be major taxpayer subsidy. If people want to argue that there should be major taxpayer subsidy, I can respect that argument. I still don’t think it’s the right way to do this.
Because what we have today is an industry where fares are low and service is plentiful. (The exception to that is in small cities, but if that’s an important priority for the country, then the government should replace Essential Air Service with a subsidy program that works much better.) Has seat pitch tightened? For the lowest possible fare, yes. But while that has happened, options to get more legroom have increased dramatically.
People have a choice.
On your point about fees, here in the US any mandatory fees (including fuel surcharges) are required to be included in the displayed fare. For options fees, it’s not included, but if it’s not being displayed in a fair manner, then that’s a disclosure issue, not a structural issue of how the ancillary services are sold.
If you’re truly concerned about your laptop being in peril, then pay extra for more legroom. Those people who don’t care about extra legroom but just care about a cheaper fare can opt for the cheap seats. Everyone has a choice.
I couldn’t care less what the fare is. The total cost is the only thing that matters.
The fare could be 0 if everything was a fee (fee for a reservation, fee for a seat, feat for using the jetway, fee for fuel, fee for engine oil, etc. etc.)
Society is worse off without APPROPRIATE regulation. An unregulated free market does not provide safe transportation. A free market doesn’t work without transparency, and there’s hardly ever transparency in an unregulated market. An unregulated free market would utilize child labor. An unregulated free market will provide inhumane transport (trapping people for 9 hours in an airliner in the ground). And an unregulated free market is providing inhumane seat sizes.
It’s about time that Congress did something useful with regulating minimum seat standards.
“An unregulated free market does not provide safe transportation.” Except air travel is one of the safest ways to travel, specifically because safety is regulated at the airlines.
As to minimum seat standards? I might be in favor of a floor for space, but I’d also like minimum standards for the space in seats in the back of cars.
“Except air travel is one of the safest ways to travel, specifically because safety is regulated at the airlines.” Safety is heavily regulated.
– Change fees make sense. But imposing the same flat fee for any domestic restricted airfare, no matter how much the fare cost, no matter how far in advance the ticket was purchased, no matter how close to the flight the change was made, does not make sense at all. A graduated scale starting with a nominal charge (say, $25) up to a couple months before before the flight to “no changes possible” 48 hours in advance, would raise the same amount of revenue, but be more fair.
– I agree; the airlines introduced baggage fees stupidly. I think the fees make perfect sense, but when the airlines introduced them they kept yammering on about fuel costs, when in fact it was simply because the airlines needed to make more money (so fuel was only indirectly related to the baggage charges.) This had the predictable effect of making a lot of people angry when fuel costs went back down, yet the baggage fees stayed the same (or increased!); talk about not planning ahead to when the skies were NOT falling!
– Airlines could do themselves a LOT of PR favors if they would show a lot more public love towards coach passengers. While certainly those folks up front (and the last-minute business flyers in the back) drive most of the profits, much of the passenger volume is ordinary schlubs. Nothing is more galling to a coach passenger than an airline that yammers on and on about the latest years of Chateau d’ Snoot available in first class on flights to Paris, the latest amenities available in premium classes, etc. without any mention of coach. Reading about all this in the in-flight magazine while your knees are jammed in the back of the seat in front of you is especially fun. (And, no, talking about re-introducing a little packet of cookies in coach doesn’t count if it’s in the same article about re-designed lie-flats up front!)
– I agree that seat size shouldn’t be regulated (beyond safety checks), but the “legacy” airlines need to tread carefully with further reductions (here’s looking at you United, with your just-ordered 10-abreast domestic 777’s!.) If they keep degrading their cheapest product with additional fees, tighter seats, etc., customers are going to (rightly) wonder if they shouldn’t just take a little additional abuse (at a much lower price!) and just fly a ULCC. Those penny-pinching leisure passengers may not drive much profit, but they do generate a lot of cash-flow and put butts in seats.
Air New Zealand, Singapore, and a boat load of other airlines which many people believe have a superior product have 10 across 777. I don’t hear complaining about them…
Consumers get to make a choice. However, that breaks down if there is no “better” option (in the mind of the consumer) in the market and with the oligopoly that the DOJ allowed through the recent mergers, there is a risk of losing choice. I think that you are spot on with the observation that airlines just keep on getting the PR game wrong by introducing something clearly to protect their bottom line (or create a bottom line) and then later promoting it as “customer (flyer) friendly.” I hate to admit that I don’t have a solution at this point to this issue: some regulation is right to ensure consumers have choice, but on the other hand the regulation that is being attempted is not being applied across the entire industry (hotels, car rentals, airports, etc.).
BNAtraveler – But is there insufficient choice in the market today? I think it’s hard to argue that unless you’re in a small town where service continues to dry up. But for the vast majority of the population there is still a great deal of choice. With ultra low cost carriers going quickly, that is only going to continue to get better. Further, legacy airlines continue to add more choices for travelers on each airplane. If it someday gets to a point where there is monopolistic behavior, then the government should pursue a legal avenue to break up any monopoly. But I don’t see us being anywhere near that.
The only monopolies that ever exist are the ones government does itself (roads, police/jail, and post office; alcohol in some states–ABC Stores) or the ones it mandates, like utilities.
You mean the ones government doesn’t bust. Google Standard Oil.
Thanks for playing along. Were you aware that evil Standard Oil dropped the price of oil significantly, as the gouging monopolist, helping bring light and heat to millions that otherwise might not have had it? Were you aware that its market share had dropped from a peak of around 90% to 65% when the government saved us from it? Google that and learn some actual history, not the standard trope taught in the near-monoply government school indoctrination system.
I believe there is choice in the market regarding baggage fees as long as Southwest allows two checked bags 50lbs or less free of charge.
The ULCCs Spirit and Allegiant have 40lbs as the cutoff for overweight on checked bags so that may be another issue coming down the pike if other airlines start following suit.
> The real issue here is… why is the airline industry being treated in a very different fashion than any other industry?
Pretty broad statement. Can you prove that? ;)
The resort fees bother me, too. The fix for that isn’t to remove the airline regulations as far as transparency in pricing is concerned, but rather implement similar rules for the lodging industry. If it’s mandatory, it isn’t a fee, it is part of the price.
I agree entirely. Congress was entirely correct to require airlines to advertise the full price honestly. Hotels and car rentals should have the same standard as airlines (as they do in much of the rest of the world): the advertised cost must be the non-optional charge to my credit card, including both taxes and fees.
More broadly, I think the US should join most of the rest of the world in including any sales taxes in the advertised prices of all goods. (Itemizing the tax separately on the receipt so consumers know how much they’re paying for the basic services we all need to live is just fine; this is what Australia does, I know from living there.) However, sales taxes are at least somewhat predictable in a given city, so a consumer has a reasonable way to guess what the total charge will be by looking at the advertised price.
This is not true of airlines. Taxes range from a few dollars to well over a hundred dollars, and the taxes are sometimes a percentage, sometimes a flat fee per segment, sometimes a flat fee per international arrival, sometimes a flat fee per ticket, sometimes a variable fee per takeoff or landing in a particular airport, sometimes a variable fee per the mood of the bureaucrat or legislator in some unknown place. There is absolutely no way for even a very-informed consumer to predict what the total cost will be based on advertised airfare, so the advertised price should include taxes as well as fare and fees.
Oliver – And I should clarify by saying I agree. I don’t think airlines should be able to break out mandatory airline-imposed fees from the base fare. I think other industries should be forced to do what the airlines are already doing. It’s the double-standard that I wanted to point out with that example.
Alex – This doesn’t apply to airlines, but it would be pretty hard to find a way to force companies to include sales tax in advertised rates. I live in Southern California and our advertising mediums reach hundreds of different cities with different tax rates. There’s just no way to do that without a standard rate applying uniformly.
I’ve heard the “it will be too complicated for businesses” argument over and over. Well tough s***. If you want to do business in multiple jurisdictions, you need to follow the laws of each one. With modern computers, it should be pretty trivial. It’s not like companies calculate prices manually and make signs by hand anymore.
Interesting post, Brett. You briefly addressed without going into detail about the biggest reason this is happening, which is “grandstanding.” The airlines are an easy target since air travel is more widely accessible than ever before (ironically, due to deregulation of the industry), and a great proportion of people don’t understand the industry and are quick to complain about the product, experiences, fees, etc. At the same time, these same people are unwilling to pay extra for a better experience. Somehow, to these people, this amounts to an injustice. With such an easy (despite false) narrative of victimization existing, politicians cannot resist taking this low-hanging fruit. “More Room Throughout Coach” worked really well the last time it was attempted. Maybe the only thing that was missing was a government mandate…
I agree with the thesis that the airlines haven’t effectively done anything FOR their customers. How something is presented makes a huge difference. That said, I’d say the airline industry isn’t the only whipping boy of gov’t regulation. The auto industry is constantly adapting to new regulations be it MPG or back-up cameras. Sure, it’s in the guise of safety or for the environment (similar to airlines) but anyone whose been through drivers license training should be fully aware that you risk your life getting behind the wheel. Airline incidents, however rare they may be, are likely lurking in the back of every passengers head every time they board.
So that said, while I champion a true free market in airline industry, as well as other industry, regulation is here to stay in one form or another. Providing it’s applied uniformly and nobody can benefit singularly I’m not going to get too upset. Actually, I’ll take advantage of my “rights” if congress decides to give me more when on a plane. While the airlines are flush (right now) they should be throwing more “free stuff” at passengers back in Y to keep them placated as it might, just maybe, keep congress off their backs a little bit in the future.
A – Legacy airlines are doing exactly that. They’ve brought back free snacks in coach. They’ve included a whole bunch of free entertainment options (most recently, American). There is a lot more being provided than there was even a year or two ago.
The funny thing is that I can carry on my own snacks and my own entertainment… And generally do.
But I can’t easily carry on my own reasonable space. If that’s taken away/reduced, I have to find another carrier. As a leisure traveler, I still have that option, but when I travel on someone else’s dime, I may not have that flexibility.
Oliver – With legacy carriers, if you don’t like the level of personal space you get with the cheapest fare, you can always buy up to get more.
It’s not like the old days where it was thousands of dollars more to go into First Class. Now you can just pay for extra legroom. The options are there.
When I was young, and stupid, and still a worshiper of Ayn Rand, I too hated all regulation. For years I was a Republican, but eventually I grew up and realized that regulation is necessary to prevent excesses that the free market breeds. A pure, unregulated garden grows so many weeds that eventually there are no more flowers or vegetables. The weeds need to be regulated; they need to be pulled out before they are in control. A totally free, pure, unregulated market helps only those who have a vested interest in that market, not the rest of us. We all need to grow up and realize that market regulation is there for our protection. Airlines have a huge amount of power against us, and only a dreamer will believe that “market forces” will eventually make them see the light and give us seats with a reasonable pitch. It hasn’t happened yet. Why think it ever will?
Dan T Nelson – Are you suggesting I hate all regulation? That’s not true. Safety without question should be regulated. (But throwing out regulation under the guise of safety when it’s not is despicable.) And I am a believer in antitrust enforcement if the free market isn’t behaving correctly. But where is that happening in the airline industry? Fares are at an inflation-adjusted low point. Airlines have started fiercely competing on product as well. You want airlines to give you seats at a “reasonable” pitch? They’ve done that. Fifteen years ago, you had one choice when you flew coach. Now if you’re price sensitive, you can get the cheap seat with tighter pitch. If you care about comfort, you can pay for extra legroom.
Regulation is necessary without question. But there’s good regulation and bad regulation. The airlines seem to get hit with a lot of attempts at bad regulation.
Thats true for some people cranky, but what about those travelling for business?
Their travel depts generally mandate the cheapest fares for most people. Thus if people need a bigger seat, they have to pay out of their own pockets. That’s fair if someone is going on vacation, but not if they are working, and they are forced to travel.
The customer, is not the user in this case, so it’s not really a proper market situation.
Marks – Well that’s an issue for your company. If the company thinks that space isn’t important and wants to save money, then that’s for them to decide. A more enlightened company might be willing to pay more for comfort. If people have to travel all the time, they might want to pick companies that allow that.
It would be more realistic without OVER-regulation and OVER-reaching. Some more regulation is needed without exaggeration.
The term “free market” the way economists portray it classically never ever existed & you can prove this with a few social experiments of human nature. When free market is mentioned in the political arena, it refers to something completely different – it means capitalism by witch only a select few benefit as in Naomi Klein’s book “Disaster Capitalism.”
So ask yourself this question – has deregulation ala an attempt at the appearance of a free market really benefited you the consumer? My guess is once you look hard enough the answer is a resounding no.
SEAN – Has deregulation in the airline industry benefited the consumer? Unquestionably. Fares are fare lower and options are much better than they were under regulation.
What seemingly began as a jeremiad against regulation ends with the (correct) epiphany that the airlines have created the reason for the proposed regulation.
I LOVED your post about this and agree 100%! Thanks for putting it out there! Funny, I wrote to my senators and congressman about this same subject a month ago when the riders first started getting publicity and to date I’ve received no response. Nothing.
Half Random.. School Buses in New York State have to have seat belts:
http://www.safeny.ny.gov/sbus-ndx.htm#law
They introduced them when I was a kid. They were always wrapped up in the crack between the top and bottom of the seat. Why? Among other things they ended up being a safety issue because kids could use them as a bit of a weapon. (Heavy thing at the end of a rope.)
I’m sure we’d get some unintended consequences out of any regulation that the regulators wouldn’t expect..
Yes, there are often unintended negative consequences out of regulations. But there are also unintended negative consequences out of not having regulations. The question is whether regulations do more harm than good. It’s very easy to find examples where they do, but in general, regulations do more good than harm. The challenge is to balance them effectively and adjust when regulations are harmful; the kneejerk argument that “regulations sometimes have negative consequences, therefore we should avoid regulation” is counterproductive.
One more thought. I’d be in favor of some mandatory regulated reporting as to the seat space on an airplane. Something that gives a good apples-to-apples comparison. (Seat Pitch doesn’t work, since the width of seats can vary.)
While seat width can vary, I still know if seat pitch is 34″ or more, I’ll be comfortable. If seat pitch is 29″ or less, I won’t book with that airline. So, I can at least get some information from knowing the seat pitch.
Great post. Completely agree.
I think airlines get more attention for several reasons. Even with this being “the dark days of aviation” versus the 60’s and 70’s, they are still sexy to be associated with.
Airlines are also easy for congress to regulate because more than any other part of the travel industry (save busses and trains) they fall very neatly into the interstate commerce clause. Hotels sell services across state lines, but individual hotels only exist within 1 state. Airlines transport from one state to another, and usually from one federally subsidized facility to another.
As far as requiring feed to be in the price, if madatory fees were allowed to be removed from the price, all airlines would sell tickets for $1, then tack on a series of mandatory fees to get your fare. It would be chaotic and highly deceptive.
I don’t think that reregulation is the answer, but the airlines brought this on themselves by starting with all this nickel-and-diming. Lots of people feel that airlines should charge one honest fare and omit the extra fees. This is the heart of the Southwest “transfarency” campaign. Also, the fees aren’t taxed like the base fare is, so if the tax percentage was based on the “all in” price and not the artificially low base fare, this problem would go away. I’m not a fan of heavy handed government but this is a natural response to airline behavior over the past decade.
I think there is much truth in your observation to the salesforce gathering about this folderol being to some extent self inflicted. Much as we like to think of folks being rational & dispassionate, a good propaganda is sometimes needed to counter the constant bleating of certain circles that everything could be made just swell if only we had a few more Rules.
Example: bag fees. Rather than just springing them ex nihlo, a campaign featuring some guy with 4 suitcases & a steamer trunk with the tag line “why should you pay for HIS stuff?” might have gone down a bit better than mindless urging to “fly the friendly skies”.
I have to agree with this. Airlines have not even tried to put a positive spin on their gouging.
Be careful what you wish for : would you prefer for them to create that spin thinking their customers are mostly stupid enough to buy it ?
What airline allowed you to check four suitcases and a steamer trunk for free before the introduction of bag fees for pretty much every bag?
Eh, looking at united.com from the year 2000 (archive.org), they offered two free domestic bags.
Truth in advertising.
Your point being, I assume, that the effectiveness of propaganda is in direct relation to its Truth.
I think congress sticks their noses more into the airline industry is because more people complain about the airlines more then their local ferry service or the price of M&Ms in the hotel mini bar. There is so much more that someone can complain about airlines for, so they are an easy target for the news media. And we all know once a news source post/prints a story even a twisted fact story, it goes viral quickly which get’s people talking and some member of congress jumps on the band wagon to look good for the voters in their state.
Airline fees don’t really bother me because I know I can buy a ticket and if I don’t check a bag or care where I’m sitting, I can fly from point A to point B without coughing any extra money. I’m not bothered by the $5 bag of candy in the hotel minibar because I don’t have to eat it.
I’d rather have mandatory fees banned such as a resort fee that are in addition to the room rate at hotels be banned. It’s not right for a hotel to charge for amenities that you may or may not use. They can charge a pool use fee, but you should be able to get out of it if you aren’t going to use the pool.
I agree. If resort fees are mandatory, then they should be included in the base rate. This is a case where the goernment should get involved since false advertising should be illegal.
1. Airlines.Too many and too narrow seats and too little pitch will make fast evacuation too slow in emergencies.
2. To me, the most outrageous fee is AA’s $75 fee for traveling within 21 days of booking. Unlike transporting your bags, they provide no service for this. (Other airlines, too?)
mandel.jerry1 – There is regulation surrounding required evacuation tests. If the new seating configurations can’t support the evacuation requirements, then they aren’t going to be allowed. (If the FAA is failing to enforce this stuff, then that’s a different issue. But the rules are there.)
American $75 fee? Are you talking about redeeming miles? There is no fee for buying a regular ticket. I agree that’s an obnoxious fee.
I know the fee is when redeeming miles. I think, but am not sure, it is also when going on paid flights.
mandel.jerry1 – I am aware of no airline that charges a close-in booking fee for paid tickets.
Of course other than the fact that the close-in tickets are generally (though not always) more expensive due to advance purchase requirements on cheap fares and revenue management controlling availability in the fare classes which can be used for cheap fares.
With fixed prices (except Delta) for awards at a given level, there’s no comparable increase in the typical price of an award if availability is there relatively close to departure, which I guess is the logic for the fee. But that fee certainly limits the usefulness (hence value) of AA miles for non-elites. Particularly given BA’s increase in the cheapest redemptions to 7500 points and AA’s new 7500 mile redemptions for <500 mile flights, AA miles might become valuable for short hops except for this fee, which hurts this kind of redemption much more than more expensive redemptions.
Since I only use AA miles or BA Avios, the close-in fee with AA miles is outrageous
HP didn’t have APs? ;)
John – Ha, yeah. Though it’s hard to call that an ancillary fee.
The SEAT Act doesn’t specify a minimum. Rather, it merely directs the Sec of Transportation “(1) to establish minimum dimensions (including width, length, and seat pitch) for passenger seats on aircraft operated by any air carrier in the provision of interstate air transportation or intrastate air transportation; and (2) for the safety and health of passengers.” If I am the Sec of Transportation, I’d simply go with the existing standard of 90 sec evacuation time at maximum density (A380 with 853 seats, 737-800 with 189 etc).
As much as I like the free market, airlines receive a substantial number of public benefits and need to remember that when charging outrageous fees. We regulate a lot of private industry fees (ie electricity) already.
You made a point (echoed by Doug Parker a number of years ago regarding the Tarmack delay issue) in your piece that bears repeating. If the airlines would focus a bit more (not necessarily a lot more) on a decision’s impact on the consumer when making its decisions, the government would have less rationale to regulate the industry. Self regulation is better than outside regulation. Your response to Mario in the first point illustrates this. If the airlines would take the initiative to come up with a better standard for seats and aircraft real estate measurements, there would be no need for Congress to meddle (but they probably will anyway, given the nature of the beast). Now that the industry is more financially stable and can invest in itself instead of finding ways to merely survive, there should be an improvement in this area.
I wish that Congress not get involved in this kind of stuff, unless there is clear evidence of need. But, there may be need. However, I am not looking, first, to Congress.
We have a DOT whose responsibility, I believe, is to carry out consumer-protection legislation Congress has passed. If we, the travelers believe DOT is derelict in its duties and we point that out to them, and things don’t meet what we think is necessary, we should then go to Congress to force DOT to act. If it is not a matter of DOT dereliction of duty but rather one of DOT lacking authority under existing regulation, then, we should ask for Congress to either force DOT or enact appropriate regulations. DOT may already know the legislation is inadequate and has a responsibility to ask Congress for action.
Many people and groups may think competition eliminates the need for regulation. A4A, for example, argues consistently that there is no, or little evidence that competition is lacking anywhere, or that DOT has compelling evidence that consumers are suffering significant injury for the lack of any regulation.
I take the position that consumers have a responsibility to make airline choices with due diligence. The Secretary of DOT makes the argument, correctly, I believe, that “knowledge is power.” But, I submit that knowledge can be gained only where there is “transparency,” where I can determine what is being offered, completely, without omission, without data manipulation and deception, where I can use facts to pick what I may want to buy and avoid what I may not want to buy. This is not about stuff simply being nice to know, but what it is–this flight makes a stop, this one requires a plane-change, even though you may market both as a “direct” flight. And, of course, is there really competition that I can get the same service from an alternate carrier? Today? I’m not sure.
I submit that today, competition is often a myth–Spirit and UA are not the same, and transparency needs to show and represent that factually. I submit what is fact is often missing in today’s airline marketing. Lawyers seem to have stretched facts to misrepresent.
I am not telling airlines what to operate, but whatever you operate, you have to be honest what it is. More, not less regulation may be necessary. I have full faith that DOT will act in my best interests. Congress, I’m not sure.
The reason Congress keeps punching at the airlines is because they are an oligopoly that provides as essential service. Ticketmaster doesn’t provide an essential service. Entertainment is optional and there are plenty of other sources of entertainment if you don’t want to pay Ticketmaster fees. Same with the minibar at the hotel. Certainly not an essential service, even if it’s a monopoly.
Airlines are providing an essential service with very little competition. Therefore, they need to be regulated. They are basically like a utility, not too much different from the electricity industry.
Jim – That’s not how I’d compare that. In the Ticketmaster/room service example, we’re specifically talking about regulating airline fees. There is nothing essential about checking a bag. You can bring a bag that fits in the overhead or you can send it via a third party.
But if airlines are truly providing an essential service like a utility, then they should be fully regulated like a utility. The government decided that wasn’t the right path back in the 1970s. If they want to change their minds, that’s one thing (though it’s a bad idea in my opinion), but the way they try to throw in partial regulation isn’t a good path.
Cranky, I’m not sure why you feel that regulation should be an all-or-nothing situation. Industries are regulated to different extents depending on their circumstances. Monopolies have to be heavily regulated, competitive markets don’t. Oligopolies are somewhere in between.
When cranky flies, he seems to always be upfront of the plane. Most likely you are against regulation because of all the perks you get.
Woodymike – Always flying up front? Clearly you don’t read the blog very often. I put up a trip report tomorrow where my return was upgraded into First. But before that I had 17 straight flights in coach. I used miles to fly up front to Asia last May. The last time I flew in First Class domestically before this last flight was way back in 2014 when I found a mistake fare to get me to Hawai’i. I rarely fly up front.
I’m generally in favor of regulation of two basic things: safety and transparency. I don’t think that the government should be in the business of determining whether or not meals should be onboard or how much room the seat should have.
I am in favor of regulation that creates transparency; I am in favor of regulation that allows consumers to compare all in, total cost pricing in an easy to understand, apples to apples way; ticket price, checking a bag, reserving a seat assignment; charging for carry ons etc..
I am also in favor of transparency for establishing a uniform, helpful way of measuring seat space. For example, many of the new modern slim line seats play with things like the depth of the seat cushion (e.g. make it shorter) to create space for more seats on the plane. Again, I’m not advocating that airlines should be restricted from this; only that there should be a standard that is presented in an easy to understand way.
I’m also not for these things for the airline industry only; I’m for them with hotles and “resort fees”, rental cars with fuel option fees etc…
The airlines have asked for this whipping by continually reducing consumer service. We went thousands of miles on business class with service that was almost as good as coach used to be. The return trip on coach (no better seats available) was awful as there was no place to put my knees and feet. Had to stay awake all night. Passing out a few pretzels will not be enough to make the masses happy. Free competition should try to be more responsive to people over five feet tall, or they deserve to be trashed.
People complain about their knees being against the seat in front. I have no problem in coach because I always have more distance than I could use by having my legs straighter and feet down low extended under the seats in front of me. Also, it is better for knee distance if legs are spread farther apart.
The other thing that we have to remember is that the American public, by and large, votes for these things with their wallets. Most consumers will select the cheapest available reasonable ticket, regardless of whatever differentiated product an airline may offer. Even things like in flight entertainment are after thoughts. So if the majority of the public is purchasing on the ticket price, they’re also saying that they don’t really care about seat pitch and if one carrier offers 31″ and another 33″ in economy – it’s not like the consumers at large value the extra 2″
Very good question!
Seems to me, it’s about control. “A” personalities abhor relinquishing control – and that includes, for duration of flight, leadership of their lives to pilots and to airlines.
Over regulation of airlines is by-product of that sense of ‘helplessness;’ attempts to overcompensate for having no control over flight as passenger, so with regulation(s), some sense of dominance is restored.
Has anyone tried to regulate legroom on the subway or personal space on a ferry?
Well, Cranky … let’s compare apples to apples !…
When I’m on a ferry or in the subway, … I have several options (I can seat down or stand up at will, I can choose to wait for the next one with the same ticket, I can change seat if my seat neighbour is not to my taste, …) ! (And, on a side note, max occupancy are meant so that I won’t be squeezed too much (well, maybe not on the subway at peak hour …).
When I’m in a plane, I have no option but to be seated for at least take-off and landing (and sometimes for most of the flight), and I’m stuck in that plane (and not the next one) for the length of the flight !… If it’s mandatory for me to seat there, a reasonnable minimum amount of decency should also be mandatory (that I’ll be able to use the seat and not have my neighbours elbows, laps, knees, shoulders, reducing my ability to sit !)…
Nothing more, nothing less !…
Take the train then.
I think that Congress should codify Rule 240 into law and make it mandatory for all airlines.
Fees are fine as differential pricing; however not as a tax dodge. I’d be much happier is airline ticket excise duty were extended to fees.
Where regulation may be needed is in instituting some version or EU216 delay and cancellation compensation.
It seems every time I turn around the airline industry is trying to stick some negative change up my a**, they gouge at every opportunity.
I think the Congress is just a reflection of large number of airline users who are pissed off at being screwed over in so my ways by the airlines.
Seat size and pitch are serious issues for the average traveler but now they are profit centers with no regard for the passenger.
And your attempts to show equivalence between airline regulation and other industries is completely useless, there is no equivalence from a flyers perspective, it’s a phony equivalence in support of the airline industry.
I enjoy and read your email every day and generally agree with and support you positions. This is the first I’ve written a reply to one of you articles, this time you pissed me off.
Over the last few years the airline industry has done nothing but gouge customer with bull shit fees, I can see why so many flyers are also pissed off, this post sounds like it was written by the airline industry (although I know it wasn’t and you wouldn’t, but just sayin).
A devoted reader
Ron