Unless you read the federal register for fun, you probably missed the Oct. 2 regulatory review by the Department of Transportation. It invites comments from the public as the agency considers “existing regulations and other agency actions” to evaluate their continued necessity, determine whether they are crafted effectively to solve current problems, and evaluate whether they potentially burden the development or use of domestically produced energy resources.
Sounds pretty innocent, right?
But the comments on the regulatory review, OST-2017-0069 — and the likely actions the agency will take — are beyond alarming.
If you travel, as many readers of this site do, this will definitely affect you in the months and years ahead. But they’re also a preview of the conflict ahead between a pro-business (and sadly, often anti-consumer) administration, cheered on by the industry and lobbyists — and a few lonely advocates.
They also affect this site directly. Because it’s clear to me that when it comes to consumer protection, travelers, and indeed, all customers, are on their own. If we don’t stand together, we will lose.
Fortunately, there’s a way to fight back right now. My winter fundraiser starts tomorrow. Please consider supporting this site and one of the last advocates standing.
That’s not hyperbole. The threat is real.
This isn’t some inside-the-beltway story. Thanks to federal pre-emption, the DOT is charged with protecting consumers. It is often the first, last, and only option for air travelers who have been wronged. What happens next matters.
To understand how bad things could get, you have to read the comments from the airline industry. If you have time, you can review the three-part analysis from Airlines For America, the airline industry trade group. Here’s part 1, part 2 and part 3.
Basically, the airline industry wants to neuter what’s left of the agency, at least when it comes to consumer protections.
It cites one airline-funded study after another that suggests any kind of government regulation has harmed competition ad caused confusion in the marketplace. The documents are breathtaking in scope, stunning in their arrogance and contempt for their own customers, and deeply offensive to every airline passenger.
And yet, there’s an excellent chance that Elaine Chao, the current transportation secretary, will summon Blane Workie, the assistant general counsel for Aviation Enforcement and Proceedings at DOT, into her office soon and order her to begin dismantling her division.
That’s not idle speculation. Follow the timeline of the department’s decision to abandon its two proposed consumer protection rules. The ink on A4A’s comments hadn’t even dried yet before the DOT had granted two of the airline industry’s wishes.
But let’s get to the specifics. What would consumers lose? A look at American Airlines’ comments to OST-2017-0069 offer a helpful guidance.
The department, it noted, should consider dropping these two rules:
Full Fare Advertising
The Department in 2011 finalized a rule that requires airlines to include all government taxes and fees in the price of any ticket advertised to consumers, rather than enumerate the taxes and fees separately. “In promulgating this regulation,” says American Airlines, “the department did not demonstrate that consumers are substantially injured when the government’s share of a ticket price is quoted separately.”
The DOT also finalized a rule in 2011 that requires airlines to issue full refunds for cancellations made within 24 hours after the reservation is booked, without penalty. American notes that “Because airlines both (a) make clear to customers during the booking process that certain fares are nonrefundable, and (b) offer customers the option to purchase fully refundable fares, any injury that occurs to consumers who purchase nonrefundable tickets is precisely the type of harm that can be reasonably avoided.”
The airline’s language is seductive. It implies that the federal government has overreached and that a deregulated and highly-competitive airline industry should be free to set its own policies. It asks for a smoking gun when it knows damn well the terminal is littered with bodies.
Don’t fall for that nonsense. The airline industry isn’t — can never be — fully deregulated. If it were, then planes would be falling out of the sky. It’s not highly competitive. Thanks to a series of government-sanctioned mergers, there’s very little competition left. It’s an oligopoly.
If the airline industry truly cared about competition and the free market, it should be demanding the elimination of antiquated cabotage rules that limit foreign airlines from flying domestic routes in the U.S., or for the removal of antitrust exemptions to codesharing, another anticompetitive practice sanctioned by Uncle Sam. It should call for the end to all government subsidies like the Essential Air Service program. At the very least, why not eliminate federal pre-emption so that you and I can sue an airline in a state court and successfully recover damages when something goes wrong with a flight?
But no. Instead, the airlines are asking for the specific removal of inconvenient consumer protections like the 24-hour refund rule and the full-fare advertising rule.
And make no mistake, these rules should not even be necessary. Airlines ought to be doing this because it’s the right thing to do. The government should not have to tell them. The fact that they do says something is very, very wrong with the airline industry. It is a deep dysfunction, an industry-wide toxin, caused by a manipulated marketplace, misguided government policy and the irrational pressures of shareholders. The airline industry has lost sight of what it does: transport people.
And so here we are. This is war. The government has switched sides.
Whose side are you on?
If you want to support consumers, please consider becoming an underwriter of this site now. My advocates and I are here for you every day. We use our media platform to encourage airlines and other companies to do what’s right, even when the rules, the courts and the federal government can’t or won’t.
Some of you reading this may think having an advocacy site like this is unnecessary, that market forces alone will compel companies to do what’s right. I hope you’re correct. But what if you aren’t?