The U.S. Department of Transportation today issued a long-awaited final
rule on a number of air travel consumer protections it had proposed last June.
While new regulations related to tarmac delays, contingency plans, consumer
complaints, flight delay notifications, oversales and other areas are set to
take effect in 120 days, DOT deferred a decision on whether to force airlines
to make information about
charges for optional services available via the global distribution systems in
which they participate.
In a press release, DOT
indicated that it would "issue a supplemental notice of proposed
rulemaking later this year that would require, among other things, that ancillary
fees be displayed at all points of sale."
The question of
thorough optional service fee disclosure in GDSs is the element of DOT's
rulemaking that has drawn the most attention from the travel management
community, and pitted airlines against GDS operators. Most U.S. airlines are
opposed to the potential rule because, according to DOT, they believe it would
"harm consumers by increasing airline distribution costs, arguing that
GDSs would charge the airlines fees to upload the information into the GDS
system ... The carriers contend that the GDS distribution system is
anti-competitive and not efficient, and that requiring the airlines to provide
fee information will further bolster the market power of the GDSs without
allowing for substantive competition from third-party vendors."
In deferring final
action, DOT noted that required fee disclosures on airline websites, online
travel agency screens and e-tickets "partially address the problem of
hidden and deceptive fees and allow consumers to price shop for air
transportation." DOT also noted that it cannot mandate disclosure via GDSs
"since we lack information critical to a decision on the issue,"
including the costs, benefits and competitive implications. "The
Department wants to ensure that any action it takes does not have unintended
consequences, particularly given the sensitive nature of the market and the
negotiations currently taking place between carriers and the GDSs."
The Business Travel
Coalition welcomed DOT's statement that a supplemental rulemaking later this
year would address fee disclosures at all points of sale. The Open Allies for
Airfare Transparency group, which represents GDS operators and many others in
the managed travel sector, described DOT's final rule as "a major
accomplishment."
While any regulations
addressing fee disclosure in GDSs have been delayed, today's final rule does
require complete optional-fee disclosure on airline websites "in one central place ... so that
consumers have an easily accessible reference guide for the cost of these
services. The Department considers it to be unfair and deceptive to charge an
ancillary fee to a consumer, when that consumer had no simple, practical and
reasonable way of knowing about the fee prior to purchasing the ticket."
Those fees, it added, include but are not limited to "fees for checked
baggage, carry-on baggage, overweight bags, meals, on-board entertainment,
Internet connections, pillows, blankets, advanced or upgraded seating
assignments, telephone reservations, early boarding, canceling or changing
reservations, unaccompanied minors and pet transportation."
Other parts of DOT's final rule require U.S. and foreign carriers
operating to, from and within the United States to "make information available to
passengers and other interested parties about a change in flight status."
That information must be provided "within 30 minutes after the carrier
becomes aware of a change in the status of a flight." Notifications must
be provided at boarding gates, on airline websites, through airline telephone
reservations systems and on "airport display boards that are under the
carriers' control." Airlines also must offer a flight status update
service to which passengers can subscribe. On codeshare flights, DOT's final
rule "leaves it up to the carriers to determine whether the marketing or
operating carrier will provide the required notification about change in flight
status."
DOT also now requires more airlines (notably including
international carriers) to adopt and audit customer service plans that contain
minimum standards of service; adopt tarmac delay contingency plans; notify
passengers "every 30 minutes about the status of a tarmac delay,
including the reasons for the delay if known" and report tarmac delay data. DOT capped at four hours the time an
international flight—operated by either a U.S. or foreign carrier—can remain on
a tarmac at a U.S. airport before passengers must be allowed to deplane. A
similar rule for U.S. domestic flights caps tarmac time at three hours.
Foreign carriers operating scheduled service to or from the United States
also are required to "acknowledge
receipt of a [passenger] complaint within 30 days and provide a substantive
response to passengers within 60 days, as is currently required of U.S.
carriers."
In terms of oversales, DOT bumped up maximum denied boarding compensation
to $650 or $1,300 based on length of delay (from pre-existing levels of $400 or
$800), or "200
percent/400 percent of the one-way fare, whichever is smaller."
Meanwhile, DOT revised another rule to require carriers and sellers of
air transportation to advertise fares including all mandated government taxes
and fees. "Some airlines
were concerned that passengers would not know how much of their total price
consists of government imposed taxes and fees," DOT wrote. "We want
to assure these carriers that nothing in this rule prohibits them from making
this information available to consumers." This rule revision takes effect
in 180 days, with the extra time provided to airlines and air travel sellers to
adjust print advertising.
DOT also adopted a rule
prohibiting all post-purchase price increases, except in cases where
government-imposed taxes and fees increase after a ticket purchase.
"Although taxes and fees are not retroactively applied in the United
States, the Department is aware that government-imposed taxes and fees levied
by entities outside of the United States might be applied retroactively to a
completed ticket purchase," DOT explained.
In its Notice of
Proposed Rulemaking last June, DOT asked if it should require airlines to
provide two fares: the full fare with all mandatory charges and that full fare
"plus the cost of baggage charges that traditionally have been included in
the price of the ticket, if these prices differ." It determined that such
a requirement would be "too confusing" because each traveler "is unique with regard to what ancillary
services he or she needs or wants on a particular flight."