The DOT hears our SOS

It turns out that all the negative things that happened to air travelers in 2010 – invasive body scans, multiplying fees, erupting volcanoes – were offset by at least one positive change: an increasingly passenger-friendly Transportation Department.

The federal government introduced new rules to help air travelers and enforced the regulations already on the books with a fervor unlike any administration in recent memory.

“Transportation Secretary Ray LaHood is leading the first consumer-centered DOT in the history of commercial aviation,” says Kevin Mitchell, chairman of the Business Travel Coalition, which represents corporate travel interests. “And he’s doing so in a very thoughtful and sophisticated manner.”

In the spring, the agency imposed a controversial rule that effectively limited tarmac delays to three hours. A series of proposed consumer protection initiatives that would, among other things, strengthen airlines’ customer service requirements, force carriers to display airfares and optional fees to allow better side-by-side price comparisons, and boost fines for overbooking were proposed over the summer and are expected to become finalized in early 2011. If approved, they could change the way Americans fly more than any government action since the airline industry was deregulated in 1978.

And a year-end tally of DOT’s fines suggests that the agency has surpassed last year’s enforcement actions against airlines that didn’t meet its standards. For 2010, the department’s Office of Aviation Enforcement and Proceedings, the nation’s top airline cops, issued 47 tickets totaling $3.44 million in civil penalties. Last year, it issued 30 tickets totaling $2.6 million in penalties.

The fines include punishing Delta Air Lines to the tune of $100,000 for allegedly distributing a misleading brochure about baggage compensation; a $40,000 fine against US Airways for failing to quote a full airfare to customers on its Web site; and a $30,000 fine against El Al for not complying with international laws in its baggage policy.

“The Department of Transportation has made real efforts to give air travelers a break,” says San Diego-based aviation lawyer Jerry Sterns.

And it has done so without breaking the airline industry. Indeed, initial fears that the department was being too heavy-handed with air carriers, particularly when it comes to tarmac delays, proved to be unfounded, says Paul Ruden, the senior vice president for legal and industry affairs for the American Society of Travel Agents. “Consumers are being treated better, and the airline world has not collapsed.”

Quite the contrary. The U.S. airline industry is wrapping up a banner year and is expected to earn $5.1 billion in profits in 2010, according to one estimate.

Earlier this fall, the Transportation Department issued a statement saying that the new tarmac-delay rule was “working as planned,” and this month, it reported that there had been no delays of more than three hours for the month of October, the first time this has happened since the new rule went into effect.

But the department isn’t without its critics. Some worry that the government’s declarations that the tarmac-delay rule is working are premature. They point out that last summer’s weather was unusually storm-free, limiting the number of delays, and they cite research by aviation analysts Darryl Jenkins and Joshua Marks suggesting that the rule caused an increase in canceled flights over the summer, leaving 384,000 passengers stranded, and that an additional 49,600 air travelers experienced gate returns and delays because of the rules.

“I have no problem with DOT trying to improve customer service, as long as everything is well thought through,” says Michael Miller, a vice president at the American Aviation Institute, a Washington-based aviation-policy think tank. “I don’t think the tarmac-delay rule is well thought through. And I’m not alone.”

Miller says that for the DOT to cement its legacy for consumer-friendliness, it must introduce new initiatives that would make air travel noticeably better. One place to start is a partnership with the Department of Homeland Security to improve the way airline passengers are screened, moving away from the body scan/pat-down choices.

Another DOT-watcher, Thomas Dickerson, the author of the book “Travel Law” and a New York Supreme Court justice, says that the agency ought to spend more time regulating fees. Much of the airline industry’s 2010 profit was derived from fees for luggage, ticket changes and other optional products, and these extras were often poorly disclosed.

“DOT needs to address the indiscriminate use of fees to generate extra revenue for the airlines,” he says. “The reaction of airline passengers to unbundling of service fees has been mixed, and there has been litigation over surcharges, airport concession fees, government fees and passenger facilities charges.”

William McGee, who participated in the DOT’s Future of Aviation Advisory Committee on behalf of Consumers Union, says that more passenger protections are on the way. The committee has proposed a slew of new measures, including more comprehensive and systematic provisions for passengers facing flight delays and cancellations, as well as better disclosure of fees and airline codesharing.

He says he found the government receptive to his ideas and described LaHood as a “very proactive passenger-rights DOT secretary.”

There’s a sense that the department’s work to protect airline passengers is just beginning, and that any future consumer protections must be weighed against the cost to the airline industry.

Imposing new rules doesn’t hurt anyone in a year when air carriers are profitable. But what happens when the industry falls back into the red, as it inevitably will?

“In carrying out our aviation enforcement activities, we have tried to strike a balance between vigorously protecting the rights of air travelers and not being overly punitive to the companies against whom we assess fines,” LaHood told me.

In the end, putting the passengers first may be the legacy of the current Transportation Department. After years of government working in lockstep with the airline industry, LaHood and his team are finally addressing the needs of an increasingly exasperated flying public while balancing the demands of a historically fragile industry.

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