The U.S. Senate this week passed a reauthorization bill that would provide taxing and spending authority for the Federal Aviation Administration through Oct. 1, 2013. The last FAA reauthorization expired in 2007; the agency ever since has been operating on a series of extensions, with the current one set to expire April 1. Approved by senators 93-0, the $34.5 billion bill for fiscal years 2010 and 2011 includes timelines for deployment of the "NextGen" air traffic control system, various airline customer service requirements and a bevy of new safety rules. It also addresses concerns about pricing transparency as it relates to full disclosure at the point of purchase of all airline charges and fees.
The U.S. House of Representatives in May 2009 passed its version of FAA reauthorization legislation. The two versions will be reconciled in conference before a final bill is sent to President Barack Obama.
According to the Senate FAA Air Transportation Modernization and Safety Improvement Act, the U.S. Department of Transportation would be required to "establish rules to ensure that all consumers are able to easily and fairly compare airfares and charges paid when purchasing tickets for air transportation, including all taxes and fees." Ticket sales in all channels must include, for example, information on fuel surcharges and fees related to checked baggage, seat assignments, peak travel dates and "operational services that are charged when the ticket is purchased."
Within 180 days of the bill's enactment, DOT would be required to issue a rulemaking requiring all airlines to publicly disclose a complete list of fees that customers could encounter.
This topic has been the focus of recent travel management industry forums, and part a discussion point during a meeting last week between travel agency leaders and DOT Secretary Ray LaHood, arranged by the American Society of Travel Agents
"The secretary asked a number of questions with respect to the ancillary fees, in particular," said Casto Travel president and COO Marc Casto. "As much as anything else, the focus was what the consumer was feeling and how they were reacting to this."
"The airlines should agree with us--and this point was made to the secretary--that access to information about ancillary fees should be provided to the distribution system at the same time the airlines put it up on their Web site so the public gets to choose how they buy their services and get full transparency," said ASTA senior vice president of industry and legal affairs Paul Ruden.
In December, when DOT issued final rules regarding lengthy tarmac delays and other customer service protections, the department noted "plans to begin another rulemaking," possibly including mandates related to the "disclosure of baggage fees." Ruden said "unbundling issues are going to be considered to some unknown degree in that rulemaking" and that ASTA had "been told that it is supposed to issue sometime in June."
Other Customer Service Requirements
Similar to both the House version of the FAA reauthorization and new DOT rules that start taking effect next month, the Senate bill stipulates that airlines and airports must develop and file within 60 days of the legislation's effective date contingency plans for lengthy tarmac delays. Airlines must provide essential services (air ventilation, usable restrooms, food and drinking water) to passengers onboard aircraft experiencing such delays, and allow passengers after three hours--if they so choose--to return to departure gates.
Carriers within 180 days of enactment also would be required to publish on their Web sites updated lists of "chronically" delayed and cancelled flights, including the on-time performance and cancellation rates of such flights.
The DOT secretary also would be required to create an advisory committee on airline customer service improvements
Next Steps For NextGen
The Senate bill charts progress for deployment of the NextGen ATC program. For example, the legislation calls for new navigation procedures to be operational at 35 of the largest airports by Jan. 2014, and all U.S. airports by Jan. 1 2018. It also calls for new GPS-based technology onboard all aircraft starting in 2015.
Meanwhile, the DOT secretary, among other mandates, would be required to appoint a "Chief NextGen Officer, to be responsible for implementation of all Administration programs associated with" NextGen; establish an "Air Traffic Control Modernization Oversight Board" representing various industry stakeholders; and submit within 90 days of the bill's enactment a description of how NextGen progress would be measured.
The FAA administrator within six months would be tasked with developing a plan "to accelerate and streamline the process for certification of NextGen technologies." Within 120 days, the administrator would be required to submit a report to Congress outlining NextGen financing "in a manner that does not increase the Federal deficit; and takes into consideration opportunities for involvement by public-private partnerships; and recommends creative financing proposals other than user fees or higher taxes."
According to Air Transport Association president James May, "The Senate demonstrated much appreciated leadership and bipartisanship by including language authorizing the FAA to issue grants to help fund NextGen avionics equipage--a critical first step in ensuring that the benefits of air traffic control modernization can be realized sooner rather than later."
Other Components
The Senate FAA reauthorization also requires:
- The FAA administrator by June 1 to "establish and track national airspace system performance metrics," including "the allowable operations per hour on runways; average gate-to-gate times; fuel burned between key city pairs; time between pushing back from the gate and taking off; average gate arrival delay for all arrivals; and flown versus filed flight times for key city pairs."
- The FAA administrator "to remove any reference to air carriers or other entities regulated by the administration as 'customers'; to clarify that in regulating safety the only customers of the administration are members of the traveling public; and to clarify that air carriers and other entities regulated by the administration do not have the right to select the employees of the administration who will inspect their operations." Moreover, the administrator "shall ensure that safety is given a higher priority than preventing the dissatisfaction of an air carrier or other entity regulated by the administration."
- The General Accountability Office within 180 days to study existing air-rail codeshare agreements and the feasibility of greater "intermodal connectivity."
- A $48 million increase, to $175 million, for Essential Air Service funding and greater flexibility for communities trying to attract new airline service, including "incentives for large airlines to code share on service to small communities."
'Vast Improvement' On House Version
Unlike the House bill, the Senate version does not provide airports with an option to raise passenger facility charges above current maximum levels, does not address foreign ownership of U.S. airlines and does not include language describing how antitrust exemptions for airline alliances would expireafter three years unless renewed by the DOT secretary.
In applauding passage of the Senate bill, the National Business Travel Association said it "is hopeful" that both the alliance antitrust issue and the provision to raise airport PFCs "will not be included in the final version that is sent to President Obama."
Noting also that no new taxes and fees would be imposed on airline passengers, ATA's May described the Senate version as "a vast improvement" on the House version.