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."
The article originally was published in Business Travel News.