New DOT initiatives target airlines’ baggage fees and price transparency. Are they enough?


When the Transportation Department (DOT) announced new “enhanced” protections for air travelers last week, the reaction was predictable. Airlines complained loudly that they were being re-regulated. Consumer groups offered a collective eye-roll, grumbling that it wasn’t enough. And the government cheerfully congratulated itself.

Just about the only question left unanswered: Will any of this actually make your upcoming holiday flight better?

Answer: Depends which holiday.

The initiatives are part of a protracted effort by the Transportation Department to improve passenger protections. They also answer an executive order issued this spring by the president that called on all appropriate federal agencies to arm consumers with the information they need “to make informed choices” about air travel and to boost competition among airlines.

But before we dive into the details, here are a few sound bites for context. Let’s start with the airline industry, which is not happy.

“We continue to believe that efforts designed to re-regulate how airlines market, sell and distribute their products and services — particularly on their own websites — are bad for airline customers, employees, the communities we serve and our overall U.S. economy,” says Jean Medina, a spokeswoman for A4A, an airline trade group.

Also unhappy, but for different reasons: consumer advocates.

“The DOT’s new rules are a start,” says John Breyault, a vice president of public policy at the National Consumers League. “But they don’t do much to address a key consumer concern: the outrageous number of fees and penalties — so-called ancillary revenue — imposed on consumers by the airlines. Absent pressure from Congress, the DOT often seems happy to look the other way while airline profits — fueled in large part by all those fees — soar to record levels.”

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Perhaps the only people smiling are the folks behind the initiatives, who talked them up this week at the agency and executive level. The actions, explained Transportation Secretary Anthony Foxx, “will enable passengers to make well-informed decisions when arranging travel, ensure that airlines treat consumers fairly and give consumers a voice in how airlines are regulated.”

Even President Obama gave the plan a shout-out in his weekly radio address, saying the new rules would help air travelers make better decisions “and hopefully avoid a few headaches, too.”

“That’s what this is all about,” he added. “Taking steps, big and small, that can make your life a little bit better.”

If you’re expecting any of this to significantly improve your upcoming holiday flight, don’t hold your breath. While some of the rules are final, like the prohibitions on display bias, others, like the new requirements on performance reports, don’t kick in until 2018. And the proposed baggage-fee refund rules could take years to become official.


Why the delay? For years, airlines pocketed your $25 checked baggage fee, whether they returned your bag or not. It didn’t matter if your bag was lost or misplaced, the airline would keep the money — after all, it transported your bag, didn’t it? The Transportation Department has taken some action already, requiring airlines to refund the fee if they lose your luggage. Now the government wants to create a rule requiring that airlines refund consumers’ baggage fees when their luggage is “substantially delayed.”

But what does “substantially delayed” mean? Airlines are likely to argue for a grace period of several days. Others might ask for an hour or two. But one consumer group says a delayed bag is one that doesn’t arrive on your flight.

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“We’ve had thousands of complaints over the last 10 years from passengers traveling to cruise ships and other destinations where a two-hour wait for bags is unworkable,” says Kendall Creighton, a spokeswoman for FlyersRights.org.

The DOT is also considering new rules that would require airlines and ticket agents to quote fares with prices that include extra ancillary fees, such as checked baggage or other services that most consumers purchase, at all points of sale.

Travel agents like that idea. Zane Kerby, president of the American Society of Travel Agents, says fee disclosure should be the same, whether you’re buying from an agent or directly from an airline. “And while some progress has been made, serious challenges remain in terms of consumer access to ancillary fees,” he says.

Don’t expect to see an all-inclusive airfare that includes the price of a checked bag and a seat assignment when you book your upcoming holiday flight. A regulation that might require that has only been proposed, and a final rule could be years away.

But in the long term, the new rules could fix several things that are wrong with air travel. Kerry Tan, an economics professor at Loyola’s Sellinger School of Business, says the new luggage rules could spur airlines to upgrade their infrastructure to reduce the amount of lost or delayed baggage. Delta Air Lines, for example, recently spent $50 million on a radio-frequency ID luggage tracking system that promises to reduce losses. “This should lead to long-run benefits,” he adds.

No one said consumer protections would happen overnight, or even over a period of months, say longtime advocates such as Charlie Leocha, the president of Travelers United. But over time, incremental improvements are being made.

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“There are no game-changers in these proposals,” he adds. “They’re nibbling at the edges of consumer concerns.”

Is the DOT doing enough to protect air travelers?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

  • MF

    As long as we have a ‘free market’ Congress, things won’t change very much. Profits over people, except when the consumer advocates hold the corp’s feet to the fire!

  • ctporter

    I have to pay the ancillary fees on Delta but not when I fly Alaska or American thanks to my status on an Airline. A friend does not pay on Delta but does when he flies United. A third friend flies Southwest and has to pay fees when he flies any other airline. There are just too many variables to go with a “full price quote” in my opinion. Luggage fee refunds however IS something I think needs to happen. If you paid a fee and the luggage was not on your flight, then those fees should be refunded. As a flyer I did my part in getting to the airport in time to check the bag and board the plane, it is up to the airline to honor their part of transporting my bags and me on the same flight.

  • PsyGuy

    First, when does the government not congratulate themselves?

    Second, I’d like Jean Medina to describe how this regulation is bad for travelers that doesn’t resort to the stomp speech that regulation = costs that will be passed on to PAX’s.

    Third, I don’t want all inclusive pricing. I am much happier not having to pay a few extra bucks because i don’t travel with checked baggage, and I don’t want to subsidize the family travelers and their munchkins. I also don’t care about reserved or assigned seating. One time I actually got to sit between two beach models off to a shoot in Hong Kong, because one wanted the window and one wanted the aisle. Yes, it was only that one time, but I really don’t care where I sit on the plane, a seat is a seat.

  • PsyGuy

    I hate to praise Spirit airlines for anything but the way they are upfront about their costs, what’s included and how it works is very transparent. I find a lot of the same approaches when flying various boutique airlines in Asia. This is what it costs for you, this is what it costs for your bag, this is what it costs for a seat reservation. Would you like to purchase a meal or snack in advance?

  • AAGK

    Random thoughts: What’s a display bias? Consumers definitely don’t care about performance reports or I don’t bc I’m not a statistician (sp?). Airlines should refund the baggage fee if the bag does not arrive on the same plane and this rule will result in more careful baggage handling . As for fares, before I confirm a purchase I expect to see a screen that breaks down the price and provides a total. Every flight I’ve booked in the past few years displays this info so I may have misunderstood this part.

    Also, why is the DOT so slow? The fed gov should not get so excited that it needs years to make a final decision on a baggage fee. It’s hard to think of any other scenario where a consumer must pay for a service they don’t receive (except for cell phone plans, cable, repair companies…).

  • Rebecca

    I think in this sense, a display bias refers to a company showing search results differently. A costlier option would appear more prominently, despite choosing to sort “lowest to highest” in the search result; they’re trying to somehow influence the purchasing decision, the company says it’s fair advertising, while the consumer advocate would say it’s deceptively unfair practice. I think, anyways.

  • sirwired

    It baffles me that airlines do not already automatically refund your baggage fee if it does not arrive on the same flight that you do. Do they misdirect THAT many bags that such a concession would actually cost that much?

  • Alan Gore

    It’s not a free market so long as airlines get to have their rules enforced and their competition locked out by the government. This goes times one hundred for pharma.

  • Bill___A

    They regulate already some things, like how many hours a crew can work before they need a rest, and such. They should regulate a few more things, like the minimum size of a seat and how far the minimum space is between seats. The airlines have shown that rather than be reasonable about it, as soon as one airline breaks the barrier to a smaller seat the rest follow suit out of fear of being unable to sell seats.

    It is now 2016, and yesterday I took an extremely uncomfortable flight on a Boeing 737. The “premium” seats were sold out and not bigger anyways. One person said they were too “cold” and the flight crew turned the temperature up on the other people who were then forced to be too hot.

    People should bring a sweater and the airline should make the seats big enough so they can wear one.

    I was thinking to try the inflight internet, but there was a sign up page and there wasn’t really enough room for me to comfortably even use the internet. The airline spent a bunch of money putting internet on the plane and few people will use it, even people who would ordinarily use it.

    I can understand how taxes and fees charged by a third party (government, airport, etc.) can be shown as separate fees. Everything else required to buy a ticket, a seat, a boarding pass, a checked bag, etc. should be included in the fare. I can understand charging more for an extra checked bag, but not the first one. Fuel surcharges should be banned. That’s what the fares are for, to go up and down based upon the costs of the flight. With back end systems being so automated, the cost to the airline of servicing a ticket has never been lower in recent memory. Very few human hands – if any – have to touch many systems these days.

    We have seen what largely unfettered deregulation has done. In some cases, it is okay but in other cases, it is detrimental (baggage fees for carry on bags, for first checked bags, fuel surcharges, etc.). The airlines had their chance to do it right, they blew it.

    Forced dynamic currency conversion and resort fees should be banned too. The government is supposed to have a role and one of those roles is to stop travel companies from doing this crap.

  • Bill___A

    Maybe so, but assigned seating is not so much a “cost” as an additional revenue source. They have to put you somewhere and assign it sometime, to do it in advance should actually be cheaper because they don’t have someone doing them all at the last minute. Having one free checked bag is a way to get more room in the cabin for people who do wish to carry on their bags. Flying is a shared experience. The airport supplies bathrooms even if not everyone uses them. It doesn’t work to have everyone “just” pay for exactly and precisely what they use. Do you have no coffee on the plane and become resentful when someone else has one? It is in the price of the ticket.

  • Bill___A

    Maybe!

  • PsyGuy

    Who does assignments at the last minute, they are done by computer. It doesn’t cost them anything.
    No it doesn’t free up any space in the cabin. You can’t fit a 38″ roller in an overhead. You aren’t freeing anything up.

    Free bathrooms, wait I have an idea for a new revenue stream.

    PAX’s are welcome to all the airline coffee they want, I have a proper cup or two of espresso before boarding the flight, should that be what I need.

  • michael anthony

    One thing missing is seathe size. A few democratic members of Congress proposed a seat size regulation, including pitch, and it never made it oUT of committee. Could it be because the big 4 carriers donated $25 million to congress??

    It’s not only for comfort, but also safety. Aircraft are certified for safety based on type, like a 737, but also for evacuation in 90 seconds. That evacuation is based on the prototype of number of seats. However, many carriers squeeze in more, smaller seats, with a tighter pitch and that requires no other safety testing. This could be 10 or more seats which may significantly alter ability to evacuate. They also are allowed to use computer simulation on evacuation which truly doesn’t match real life. Simulation is used to cut down on injuries during evacuation testing.

    So, this bill, which would have been good for consumer safety was shot down. It’s a point where regulation makes sense. Think of that next time you are squeezed in your seat.

  • joycexyz

    A free market is a nice concept, but it’s certainly not free when you don’t have choices. Mergers and collusion have seen to that.

  • joycexyz

    Ryanair thought of the pay potty several years ago. But I guess the inevitable unpleasant consequences caused them to abandon the idea.

  • joycexyz

    Actually, it must cost them a lot to send bags on mysterious journeys to undisclosed destinations.

  • Adrienne E

    The process of administrative rule-making is intentionally slow, and much of the delay is covered under the Administrative Procedures Act and several other statutes. Here’s a 37-page summary of the process from the Congressional Research Service: http://nationalaglawcenter.org/wp-content/uploads/assets/crs/RL32240.pdf. I was going to summarize it here, but then I remembered that this was the most boring class I took in 3 years of law school.

  • sirwired

    Well, you already generally have to visit the baggage office at the airport when your bag doesn’t show up, so they are already staffed to handle things.

  • AAGK

    Why would you ever take that class?! Maybe the airline thinks 5 years is the appropriate amount of time to wait for the bag to arrive before it’s considered lost:)

  • Lindabator

    last 6 – yes, 6 – flights I have had to have the airlines give me a new piece of luggage to replace the one they damaged – so not toos habby, as I always have a new bag! HAHA

  • Kerr

    Chris posted a comment about that earlier this year, but apparently the FAA isn’t worried about the time it takes people to exit their seats, but rather whether they would block the door when exiting. So they don’t care how long it takes to get out of your seat/row, as long as everyone can pass through the exit in an orderly manner.

  • michael anthony

    Tight pitch is dangerous because it allows more seats. The aircraft may be certified for evacuation in 90 seconds for say 200 seats. But with a tighter pitch, they squeeze in more seats and they aren’t required to redo the evacuation testing. They can do it on simulation. Pitch also affects the ability of the elderly to get moving out of their seat quickly.

    My main point was, they add more seats, making less room with more pax on board and are required to do no other safety testing.

  • BubbaJoe123

    I believe that the evacuation tests are for “up to XXX passengers,” so, while they could change pitch to add more seats or increase pitch elsewhere, they can’t go above that maximum passenger level.

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