Government set record for airline fines in 2012 — is that good news for passengers?

vapor trailA more activist Transportation Department, which set a record in 2011 for the number of fines it issued against airlines for violating aviation consumer protection rules, appears to have maintained its momentum this past year.

In 2012, the Department issued 49 fines for consumer rule violations and assessed $3,610,000 in penalties, exceeding the previous record of 47 fines and $3,264,000 in penalties issued in 2011.

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Among its most significant actions: policing new rules that require airlines and travel agencies to quote a full fare and disclose baggage fees, and fining the first foreign airline for a tarmac delay.

“Consumers deserve to be treated fairly when they fly,” says Transportation Secretary Ray LaHood, who called protecting air travelers’ rights “a high priority.”

While the fines may seem small in comparison with other penalties imposed by federal regulators, they’re important for two reasons, say insiders: First, they’re a significant increase from the past, signaling a no-nonsense approach to consumer protection from the federal government. (Consider that in 2010, the DOT’s Aviation Consumer Protection and Enforcement division, which is charged with enforcing consumer laws for airlines operating in the United States, issued just 27 orders and $1.7 million in fines.) And second, each enforcement sets a precedent and puts travel companies and their lawyers on notice that the activity they’re engaging in is illegal and won’t be tolerated.

In the end, that benefits all air travelers.

But the department’s enforcement actions in 2012 — you can find most of them online — tell a bigger story than that of a government trying to protect air travelers. They’re a road map of service meltdowns and “gotchas” that, seen as a whole, provides a useful guide for anyone flying this year.

For example, one of the most important DOT actions of 2012 involved enforcing a rule that requires airlines and travel agencies to quote a full airfare, including any mandatory fees and surcharges. In July, DOT fined Travelocity $180,000 for failing to include fuel surcharges in some international fares through a feature on its site called a “flexible date” tool. The online agency says that it wasn’t capable of including certain carrier-imposed surcharges, such as fuel surcharges, in its price quotes.

To address the department’s concerns, Travelocity promptly deleted the flexible date tool from its site. But the takeaway for air travelers in 2013 is clear: Although the DOT’s interpretation of its full-fare rule is unambiguous, the travel industry’s may not be. Always double-check the price before clicking the “buy” button.

Another key enforcement action came in October, when DOT fined the Australian airline Qantas for failing to disclose its luggage fees. Under new regulations, airlines are required to show baggage fees “clearly and prominently” on the first screen where they quote a fare for a specific itinerary. The government alleged that Qantas waited until later in the booking process to reveal the fees. Qantas says that it did disclose the charges, but in a different place on its site. It was fined $100,000.

For consumers, such an enforcement action carries an obvious lesson: Always be on the lookout for hidden fees, even when they’re supposed to be disclosed up front, because an airline’s understanding of “disclosure” may not match yours, and the potential for unpleasant surprises still exists.

Enforcement officials with whom I spoke for this story pointed to one more enforcement action that’s worth noting, involving a rare tarmac delay. It happened in October 2011, when a Pakistan International Airlines flight was diverted from New York to Washington after a freak snowstorm. Although the aircraft remained on the tarmac for more than four hours, passengers weren’t allowed to deplane, violating one of the DOT’s newer regulations involving lengthy ground delays.

The airline blamed a variety of technical and logistical problems for the delay. After an investigation, the government fined it $150,000 in September.

Fortunately, tarmac delays of more than three hours are an anomaly. In the last three months of reportable data to the DOT, covering August, September and October 2012, there were only two such delays, which exceeded the three-hour limit by only 4 and 6 minutes. Had the passengers on the Pakistan flight been aware of the government’s new tarmac delay rules, they might have alerted the crew that it was in violation of those regulations and they could have potentially been spared a lengthy wait in a parked aircraft.

DOT will probably extend its enforcement record in 2013, when it’s expected to unveil a draft of new consumer protection rules that would require airlines to disclose more of their fees and make airfares easier to compare. It’s also working on new regulations that would give disabled air travelers greater access to air travel. “We will continue our efforts to improve the air travel experience for consumers,” says LaHood.

That’s a promise that airline passengers would like him to keep.

Did the government do enough to protect air travelers in 2012?

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36 thoughts on “Government set record for airline fines in 2012 — is that good news for passengers?

  1. No, because none of it (the money) went to the victims (as compensation).
    The government profited while the consumers or travellers suffered.

    1. Exactly. And apparently there’s too much leeway in how the rules are written that let the airlines play the games in the first place-they thought they could get away with it, and by being fined only after the fact, they effectively did get away with it.

  2. Who actually paid those fines — the airlines or the consumers? The money collected by the government, where did it go — in the government’s pockets or to the consumers?

  3. Things would change quickly if the affected travelers received the fine money and not the government. As others have stated.

  4. As mentioned by others about where the fine money go, one thing I would like to see changed with the tarmac delay is not only the airline gets fined, but every one on board gets a full refund of their air fare or a penalty like with denied boarding, four times the cost of the one way fare. When an airline is fined for violating passengers rights, those passengers should be compensated.

  5. What NO ONE seems to remember is that Airlines never EVER pay fines themselves. Travelers pay fines for them.
    If Jim’s Airline has 1 Million passengers a year and is fined $100,000. for baggage, Jim is going to divide that up and find it’s 10 cents per passenger, add a 15 cent fee, calling it a DOTassessment, blaming it on the Government, and put an extra half-a-Million dollars in his pocket.
    Any time you tax or fine a big, rich, deep pockets corporation, there is not going to be some “fat cat” owner who steps up, opens his wallet, and pays the tax or fine. The corporation passes the tax or fine along to the consumer along with a little profit. The bookie on the corner calls that “Vigorish” and at least you know when he does it, he’s taking out a profit. Thisis far moe insidious because they get to add profit and blame it on some nebulous regulators.

  6. Call me a pessimist, but I see the airlines making sure that anything they pay fine-wise comes out of the travelers’ pockets by way of more fees and higher airfares.

  7. The government can fine airlines all they want … but does any airline actually PAY the fine? I agree with Ed, passengers stuffed on a grounded plane for four hours should receive a refund of their airfare, I can think of few things more horrible.

  8. i agree none of it went to us the comsumers(who paid too much etc) the government just kept it and wasted it just like the massive fines they put on the phamaceutical firms–they keep it and waste it never returning it to the customers etc more government ,more waste ,more regulations (not helping the citizens again) pathetic

  9. The problem with our system is when big business (and the rich) does something nasty, it is often in the name of a company which cannot be put to prison. Notice how these so called fines are often voluntary payments or settlement without anyone admitting guilt. The way I see it, company executives are not responsible to society or the community at large. They are there solely to enrich themselves, stockholders, a few bankers and to donate to politicians who need a lot of money to be in office. Apparently big business executives do not even have shame. They can stay in their jobs and still collect massive salaries and bonuses no matter how lousy their services are. Same goes for government services like the TSA. That’s what happens when big business and the government are in bed together. Sometimes Congress has to put on a puppet show showing voters that they are concerned about passenger rights. As most folks here have noticed, fining an airline invariably means fining the passengers since they will pay higher in fees and fares. What they need to do is fine the executives personally or put them to jail. Unfortunately, that penalty is reserved for customers who complain too loudly about lousy service while they are onboard a flight.

    1. Along those lines, it reminds me of when Sony was caught red handed installing root kits on people computers when they played an audio CD. From what I remember, no one went to jail. Sony got a slap on the wrist and had to refund some money to the customers that bought the CD, but not to everyone who’s computer was used to play the CD. If an individual person had done something like that, they would be rotting in jail still.

        1. “But in that case at least the victim got $7.50 in cash and a free album.”

          As I said…”Sony got a slap on the wrist and had to refund some money to the customers that bought the CD”

          1. Ed, after reading the settlement, I do not think a REFUND is one option. You could EXCHANGE the CD for one supposedly without the root-kit. Source:

            The $7.50 I suppose is compensation due to the class action lawsuit. I would not call it a refund.

            I am not a lawyer but I think there is a difference between Restitution, Compensation, Civil Damages and Refund. Maybe Carver can help here/

          2. Gawd Tony, will you give it a rest already. I wasn’t trying to get into the exact details of what the actual settlement was other then it was really nothing more than a slap on the wrist for them. I try supporting your stance but it seems you want to try to one up whatever is said, even when it supports you. You want to focus on my use of the word REFUND. Well, depending on your definition, it was at least a partial refund. The point I was trying to make was, as the story your link points to, “that it violated federal law ” yet no one went to jail where as an individual doing the same thing, would have.

          3. Ed, I am not trying to argue with YOU personally. You and I are on the same boat with this issue. I believe Sony BMG got away too easy on that one.

            I just want to make it very clear, that consumers (and passengers) should really be entitled to COMPENSATION for being hassled and not just refunded their money whenever there is a cancellation or delay caused by the airline.

          4. Well it sure as hell sounds like you are. If you want to make it very clear that consumers should really be entitled to compensation, just say that. You don’t have to try to one up someone agreeing with you by picking apart their response for absolute accuracy.

  10. Well, the government sexually assaulted millions of innocent travelers in 2012, so my vote is no. TSA, get your filthy hands away from our genitalia! There is nothing I need protection from more than I need protection from these vile thugs who are making their living fondling the penises, testicles, vulvas, and breasts of even underage passengers. When John Pistole and his band of merry molesters are rotting in jail, then I’ll know the government cares about protecting me.

  11. & who pays the fines ? Certainly not airline execs, so in the end the passenger pays the fines.
    If I was running the airline I would highlight all the dodgy taxes & charges, govts, airports etc. get away with at present.
    In Australia with Qantas, a so called “free” ticket using Qantas frequent flyer points, eg. SYD/LAX/SYD costs 96,000 points & $876 in taxes & charges & this is real money (AUD$), not the dodgy north american peso(USD$).
    It costs an awful lot to earn 96,000 points !!!

    1. Why do you keep on trashing our money US$ and country USA to make yours look good? As far as I know my country, the USA, is still the leader of the free world. However, the TSA is still quite embarrassing.

  12. Tony A – really good compensation for a delayed flight, is not having crashed.
    You make it sound like airlines like delaying people.
    If an aircraft is not airworthy is shouldn’t take off.
    What would you rather, arrive “DEAD” on time ?
    & who actually pays any compensation, not any airline employee, but rather passengers in higher fares.
    Airlines don’t have multimillion dollar aircraft just sitting around as backup, all the time (maybe in quiet times, but not when it’s busy.

    1. The choice is not always Dead or Alive. No one is proposing to fly an unsafe aircraft.

      I have worked long enough for an airline to tell you, sometimes it is the airline’s fault or error (i.e. scheduling too tight, crew sked snaffus, etc.). And yes, some airlines do have strategically positioned spares each costing millions. They have to because maintenance comes with the territory.

      As far as who eventually pays for the compensation – well airlines who consistently pay a lot will have higher cost structures. Eventually, they will become uncompetitive and deserve to die.

  13. hey Tony A don’t tell me you believe all that spin ?
    The USA is going down the toilet fast. The only thing the US leads in is govt debt, which is out of control.
    Soon you’ll need permission from the Chinese (who now own most of USA debt) to do anything.
    I’d be learning a Chinese language fast or you’ll be left behind.

    Why do you keep on trashing our money US$ and country USA to make yours look good? As far as I know my country, the USA, is still the leader of the free world.)

    1. Don’t worry. When China stops buying your raw materials, you will be in the same boat 🙂

      Last time I checked, you (and other SE Asian) allowed our Military (Bases) in your country so that we can counter the influence of China in your neck of the woods. I doubt if you would like to see the Chinese own so much of your country, too. So cheer up mate, since your government (or the RBA) will soon be printing more money like us, the EU and the UK; or else your goods will be too expensive. It called the currency wars.

  14. Australia will get a new less dodgy fed govt later this year.
    They will get us back in surplus.
    Unfortunately you have more of the worlds dodgiest profession than us & most of the govt are lawyers.
    We’ll still sell stuff to chinese, hey, Americans will all be driving chinese cars in a few years,
    Don’t worry. When China stops buying your raw materials, you will be in the same boat 🙂
    Last time I checked, you (and other SE Asian) allowed our Military (Bases) in your country so that we can counter the influence of China in your neck of the woods. I doubt if you would like to see the Chinese own so much of your country, too. So cheer up mate, since your government (or the RBA) will soon be printing more money like us, the EU and the UK; or else your goods will be too expensive. It called the currency wars.

  15. Flight attendants and gate agents should be FAA licensed and the DOT’s Consumer Protection and Enforcement Division should, following a review of a customer’s complaint, have the power to recommend (to the FAA) revocation of said license. There are too many flight attendants, working for US-base airlines, who, among other things, delight in turning the cabin into a flying police state.

  16. Dunno if it’s good news for passengers, but it’s certainly bad news for civil liberties. As long as people keep slurping up the crap the TSA is dishing out, things are only going to get worse.

  17. The DOT should fine Travelocity (T) & Spirit Air (S) as they were negligent in informing me of a quite unusual policy of ONE (1) CHECKED BAG on flights to Lima, Peru. While this situation is isolated; it shows the disregard for ethical sales practices & neither offering a refund since April 2012 – even tho I contacted within the 24 hour period to cancel (I was told by S-CSR that I only had 4 hours).
    I have posted more complete details in a forum on Code-sharing of Oct. 2012.
    Muchas gracias,
    Philip C. Brown
    [email protected]

  18. My wife and i traveled on AA airline in nov 2012 my wife needs a wheel chair and the problems we had with the staff at Miami was unbelievable they where down right rude to the extended of being discriminate because my wife as a disability when we asked for the staff members full name we refused so no the government does not do enough to protect air travelers in 2012

  19. Is there a group fighting to reduce the outrageous change
    fees being charged by American Airlines? $200 Change fee!!!!!!!!!!!!!!

        1. Thanks for the correction! It isn’t just AA that has the fee. There are options when buying an airline ticket, so pick wisely and don’t buy what you can’t afford to lose.

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