DOT Makes a Big Deal About Its New and Minor (But Good) Rule Changes

Government Regulation

Under Secretary Foxx, the Department of Transportation (DOT) hasn’tDOT Logo really been prone to take any action on anything airline-related, for the most part. But this week, we actually have a couple of final rules that have come out, and DOT is really patting itself on the back. The reality, however, is these don’t do all that much. Once again DOT is kicking the can down the road regarding more major issues. Let’s take a look at what has been done (and what hasn’t).

Enhancing Airline Passenger Protections III (read the text)
When Roman numerals are involved, you know it must be a big deal… except its not. This is the third installment in the long-standing “enhancing protections” series, but it doesn’t do all that much. What IS in here, however, I actually like.

First, and in my opinion, most important, involves changes in reporting from DOT’s Air Travel Consumer Report, where you see on-time performance, mishandled baggage, etc. Today, it’s required that airlines that have more than 1 percent of scheduled domestic revenue have to report their stats. It seems arbitrary, but this was chosen way back in the 1980s. Unfortunately it also excludes a lot of airlines. So, DOT is going to change this (beginning for travel in 2018) to require any airline with more than .5% of revenue to report. That seems goofy, but it’s meant to reduce the burden on small businesses. On its own I don’t like this, but there’s another change that makes this far more palatable.

That change? If you look at the report today it only includes information from the operating carrier. So if you look at United, that’s not entirely helpful since half the flights, give or take, are operated by regionals that report separately, if they’re big enough to report at all.

The new plan will roll up those regional numbers under the big carrier’s numbers. So SkyWest, for example, will have some shown as United, some Delta, etc. What if the regional is too small and doesn’t have to report (like PSA, Compass, and more)? Well, the big airline partner will have to report for them. Problem solved.

That means the only significant US airline that doesn’t have to report is Sun Country. (And whether that’s significant or not is debatable.) But I sure am looking forward to seeing Allegiant’s numbers, aren’t you?

And that’s most of what’s happening in this rule. There’s also one thing clarifying how and when codeshare flights have to be disclosed. And lastly there’s something that prohibits a travel website, whether an airline or an online travel agent, to bias results without declaring that they bias them. I really doubt that’s going to have much of an impact, but you know, it’s not a bad thing either. That is the entire extent of the rule, but there is another that accompanied this one…

Reporting of Data for Mishandled Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo Compartments (read the rule)
This rule has been, and I’m not kidding, 5 years in the making. So you think it might be some monumental piece of work right? Not really. This is also related to the Air Travel Consumer Report. Starting on January 1, 2018, airlines will have to report mishandled baggage a bit differently than they do today. They’ll also have to start reporting statistics on mishandled wheelchairs and scooters.

Today mishandled baggage is reported in a very strange way. DOT takes the total number of mishandled bags and divides by the total number of passengers. That doesn’t make much sense. What I really care about is if x number of bags are checked, what percentage of those were mishandled? It gives you a better idea of how good the airlines are at handling bags. Today you have airlines like Southwest which check a ton of bags, because they don’t have bag fees. So they get dinged because they have a higher percentage of people checking, but it doesn’t say how good they are at handling those bags.

The new rule is going to take the number of mishandled bags and divide by the total number of enplaned bags domestically. This is kind of strange in a different way, and it’s different than they originally had planned. Previously they had said if someone checked a bag, that would count once, but now they’re saying that every time that bag boards a flight, that counts again. This was at the airlines’ request to make it easier to track (think about interline bags). To me, I don’t like it. I’d rather know if someone checks a bag, what percentage of those are mishandled? Now if you have a connection that will count twice in the denominator. And that seems like an odd distortion.

Regarding wheelchairs and scooters being counted, that’s fine. I don’t imagine we’re going to see much of this kind of stuff.

Refunding Baggage Fees for Delayed Checked Bags (read the proposed rule)
This particular bit should come as no surprise, but this isn’t a final rule. This is just DOT starting to gather information about how to handle refunds for paid checked bags that are delayed to their final destination. Does this sound familiar? It’s because this was required by the FAA extension, and I wrote about it when that passed. So this is just DOT doing what it has to do… slowly.

Exploring Industry Practices on Distribution and Display of Airline Fare, Schedule, and Availability Information (read the request for info)
Buried underneath any actual action, this one is actually a big one that could have wide-ranging implications. But for now, it’s just a request for information.

The question being asked here is whether airlines should be forced to allow their schedules and fares to be displayed and sold by any third-party website and whether they have the ability to restrict any of that information. From an airline perspective, they feel they should have the right to sell their products through any third party, or through none, as they choose. On the other side, you have people who still think this is a regulated industry and want to treat it like a utility. They say this should be publicly available for everyone and it’s in the public’s interest to make it so that any third-party website can get full information.

Where DOT stands, it’s not entirely clear. But I’m certainly in favor of the airlines having control over this information, and they should be able to restrict who sells their product just like any other private business. But as usual, airlines are treated differently than other businesses, and that’s why we never know how this is going to turn out.

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24 comments on “DOT Makes a Big Deal About Its New and Minor (But Good) Rule Changes

  1. What I can’t figure out is why the FAA/Congress needs to TELL airlines to refund baggage fees if the bags are lost or significantly delayed. It boggles my mind that the airlines will not do this on their own. It’s my view that you should get a refund if your bags arrive on a later flight than you do, period. (As long as you checked in on-time.) If you, airline, are going to charge for something that used to be free, it’s not too much to ask to not screw it up.

    1. The same logic should also apply to parcel shipping. If you order or ship something with a guaranteed arrival, the shipper (or UPS/FedEx, etc) should automatically refund your credit card if it is delivered one minute late.

      In my limited experience, Amazon is good at this, but only if you ask.

      1. UPS/FedEx DO refund your shipping costs if it doesn’t arrive as promised. (Though you do have to ask.)

        A couple airlines will issue you some miles (maybe one a credit?) if it’s late, but NOBODY will refund the fee.

        1. Alaska and Delta will both offer a $25 voucher or 2500 miles (your choice) if a bag is delivered more than 20 minutes after the aircraft parks. Only one voucher per customer (no matter how many bags checked), but I find that to be a quite customer-friendly gesture as well as an incentive they have both used to get their baggage delivery in good order.

          A bag fee refund for a bag delivered 30 minutes after arrival seems excessive, but I get the impression this refund rule will be more about a bag delivered hours later.

          1. Maybe this is just my experience, but when I have a bag delivered late, it is less of the 30 minute variety then it is of the “we goofed, it’s coming tomorrow” variety. I think the fee should be refunded because the error was clearly on the part of the airline and went beyond just simply being busy.

            1. I don’t think I’ve ever had AA deliver my bags in less than 30 minutes; it’s typically 30-50 and occasionally more than 60 for bags that arrived on the same flight as me and are delivered to the carousel as normal. Delta and Alaska, on the other hand, most often make the 20 minute cutoff. I doubt that this new refund requirement will be about that; it will be about bags that don’t arrive on the same flight. (That happens, but not all that often to me; certainly less than 10% of the time I check a bag. But it’s very memorable and annoying when it does happen, of course.)

              I think that the discussion will be about what the provisos are. Does arriving on the next flight an hour later require a refund? What if the bag wasn’t put on the flight for safety (weight and balance) reasons? etc.

  2. If you pay for your bag in your fare (i.e. Southwest, bundled deals with an airline, waived with credit card), how would it be refunded? Seems unequal depending upon if you pay as a separate line item or not.

    1. I would think that someone with a waived bag fee (elite, credit card holder, etc.) wouldn’t be eligible for a refund of anything if the bag is late, since they didn’t pay for the checked bag in the first place.

      The bundled fares that include a checked bag is an interesting question. Off the top of my head, the simplest would either be a refund of the standalone bag fee or fare difference between the bundled and unbundled fare, whichever is less.

  3. “To me, I don’t like it. I’d rather know if someone checks a bag, what percentage of those are mishandled? Now if you have a connection that will count twice in the denominator. And that seems like an odd distortion.”

    Is it a distortion? It would seem to me that a connection is another chance for a bag to be mishandled.

    Perhaps there’s a way to offer two numbers – one for connecting bags and one for point A to B bags.

    If you assume the bag mishandling rate is uniform, a non-stop flight with a 90% success rate (making these numbers up) is easy to understand, but flying two segments (each with a 90% success rate) means there’s only a 81% chance your bag would complete the entire journey.

    So, which would be the ‘right’ number here: 81% or 90%?

  4. The airlines should have the right to decide who can sell their product just like any other business.

    1. So should the buyer then also have the right to resell the product? If I buy a loaf of bread at the bakery, the baker can’t tell me that I can’t sell it to my neighbor.

  5. Unbelievable… these are publicly traded companies, not commodities or utilities. When will the officials realize that? They should be able to sell wherever, whenever they want. They can refuse service to people within their contract of carriage and applicable anti-discrimination laws. They can charge for whatever fees they want. The market should provide feedback as to whether its policies are liked or not, in the form of lost business. NOT red tape from regulators. The industry is already regulated enough!

  6. Let’s face it, the airlines are one huge, very, very, powerful industry, with friends in high places everywhere. And, it doesn’t make any difference how much consumers complain, all they are ever going to get from Mr. Consumer Protection DOT, is yet another regulation that makes things look like they are addressing problems, but aren’t.

    Mr. Calio, A4A Prez and CEO, in his press release said: “It would be difficult to find an industry that is more transparent than the airline industry; customers always know exactly what they are paying for before they buy.” Preposterous!!

    I wonder if Mr. Calio ever, in his life, actually planned his own trip, knew precisely what service he was going to get before he paid for it, and then managed to get what he understood he was going to get when he got the ticket.

    The code-share regs are good examples of how the airlines don’t want DOT to make them say what that type of service is, something consumers can truly understand. The airlines are quite satisfied to have DOT come up with regulations that require asterisks here, star symbols there, anecdotal comments and disclosure notices to beat the band, something consumers aren’t going to look at whatever the regs require. If the airlines simply had to show a the operating airline’s designator in the front of a flight number, and the marketing carrier’s code or some symbol afterwards, like ASH324U, all of this disclosure business and DOT regs thereto would go away, once and for all. But, the airlines will never, never, stand for that, seeing a Mesa flight number for something they thought was United. What would potential customers think! IAD to DFW, nonstop, *UA6263, OK, but ASH626U, OMG!

    And about some flight’s past performance record, why do we have to go through regulation after regulation on this stuff? Someone, the flight operator, the marketing airline, every flight, everywhere, if you are trying to sell me tickets on a flight numbered ASH324U between Podunk and Peoria, is it so difficult to show, right up front, exactly what that past performance has been? New flight, new service, then just say that! You don’t know, well get out of the business! Is this rocket science?

  7. It’s one thing to mandate visibility on metasearch providers like Google Flights that direct passengers to the airlines’ websites, but I don’t see how the government could force airlines to sell through regular OTAs without also stepping in to regulate the commissions OTAs charge.

    I know the TTA has friends on Capitol Hill, but they’re no Big Pharma or Big Insurance.

    1. This regulation is not going to mandate visibility on any website. It is simply saying that OTAs cannot show biased results. They are not required to show all airlines.

      1. Ah, the way it was worded in DOT proposal made it seem like airlines would be banned or limited in picking and choosing which websites can display or distribute their fares. What you said would certainly be less onerous.

        1. Itami and Jim – You’re both right about different things. Jim is referring to something in the passenger protections rule. Itami is talking about the request for comment.

  8. “Regarding wheelchairs and scooters being counted, that’s fine. I don’t imagine we’re going to see much of this kind of stuff.”
    In the big picture, wheelchairs and scooters do not make up a large percentage of items that are transported in the belly of the aircraft, but it is actually quite horrifying how often they are damaged. And how expensive those repairs are. And how long those repairs take to be made. And what poor temporary replacements there are until the repair is made (or a new wheelchair is purchased).
    Imagine someone breaking your leg during your flight and telling you, “Sorry, but we aren’t responsible for your leg, or for paying for the repair to your leg, or for getting your leg fixed in the next hour so that you can continue on your travels and be productive on your business trip or enjoy your vacation.” It seems a stretch, but when a wheelchair becomes unuseable, it is the same as disabling an ambulatory person. Many of my disabled friends and colleagues have told me horror stories of their wheelchairs being damaged to the point of becoming unuseable following a flight and then having to go to court to get a fraction of the wheelchair’s value returned. Perhaps the required reporting of wheelchair and scooter damage will offer an insight to the true scope of this problem, and it might make air carriers take more responsibility for the damages they cause.

  9. As someone who used to work in airline reservations…I 100% support a carriers right to not allow certain people to sell airline tickets.

    Some of the websites sold broken fares that violated the minimum connect time from the second they were sold to get a lower fare and then called and demanded they be fixed for free. They offer no support for schedule changes or itinerary changes.

    The airline pays them a commission for selling the ticket and then ends up doing all of the work that is expected of a travel agent in exchange for the commission!

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