Will new airline regulations help passengers — or hurt airlines?


At 36,361 words, the document laying out the latest proposed Transportation Department passenger protection rule is an epic, a few pages longer than Franz Kafka’s novella “The Metamorphosis.”

Passenger advocates hope that after a 90-day comment period, the proposed regulation will bring positive changes to the way Americans fly. Airlines, however, claim that the story will have a darker ending, leading to an overregulated aviation industry in which customers pay more to fly.

The proposal, which you can view and comment on at Regulations.gov (search for DOT-OST-2014-0056), would require airlines to show certain basic fees upfront, at the time a fare is displayed. It would also add new reporting requirements for smaller airlines and require online travel agencies to adopt consumer protection policies. Taken together, these requirements represent an incremental, and long overdue, upgrade in the air travel experience.

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But this assumes that the DOT will embrace the planned rules, and that Congress won’t interfere.

If you think that the airline industry hates the new rules, you’re almost right. In a brief statement, Airlines for America (A4A), an industry trade group, denounced the DOT actions as overreaching and warned of “negative consequences.”

“The government does not prescriptively tell other industries — hotels, computer makers, rental car companies — how they should sell their products, and we believe consumers are best served when the companies they do business with are able to tailor products and services to their customers,” it said, adding that the rules, if enacted, would probably “further increase airline expense, and force airlines to pass on the additional costs to customers in the form of higher fares or reduced levels of air service.”

I asked an A4A representative how these rules might increase the cost of a ticket and was told that the industry group was still studying the proposal.

Passenger advocates are pleased with the proposed regulations. “DOT’s actions reinforce the agency’s unique role as the only forum — state or federal, judicial or regulatory — where consumer protections exist for airline consumers,” says Kevin Mitchell, who runs the Business Travel Coalition, a group that represents corporate travelers. Mitchell notes that the proposal is particularly necessary in light of an effort in Congress to turn back the DOT’s previous rule, which created the so-called “full-fare” advertising rule for airline tickets, requiring airlines to quote a ticket price that includes mandatory taxes and fees.

But how, exactly, would these new rules help passengers — or hurt airlines?

At the heart of the proposal is a requirement that airlines and ticket agents reveal fees for certain services associated with airline tickets at all points of sale. The DOT defines these as a first and second checked bag, a carry-on item, and advance seat assignment.

Why are the rules necessary? The Transportation Department says that fees for additional services are often difficult to determine when searching for airfares. As a result, many travelers can’t understand the true cost of travel before purchasing a ticket.

Actually, that’s a nice way of putting it. Airlines have made billions by systematically redefining what’s included in the cost of an airline ticket. Quietly stripping the ability to check a bag, reserve a seat and even carry a bag on board from the base fare allows air carriers to claim that their tickets have never been more affordable while they still earn a tidy profit. Last year, for example, domestic airlines collected $3.3 billion in baggage fees.

Forcing airlines and ticket agents to disclose these fees for a particular passenger on a specific flight at the time a fare is displayed would effectively end what many consumer advocates claim is an airline business model based on deception. Air travelers would know exactly how much they’d pay for each service at the time they pull up a fare quote. An airline ticket would effectively become an airline ticket again, in the traditional and historic sense of the word.

It’s one reason airlines are likely to fight this proposal at the rulemaking stage, and if that doesn’t work, then in Congress: In an industry now dominated by three legacy airlines, where competition is slowly being squeezed out of the system, a perfectly legal bait-and-switch can make the difference between a loss and a profit, observers say.

The DOT also has suggested several less controversial rules. Under one, airlines such as Allegiant Air and Spirit would be required to report information to the department about their on-time performance, oversales and mishandled baggage rates. Those carriers are currently exempt because of their size. Under another, large airlines would have to separately report those same statistics for their domestic code-share regional partners, or the smaller airlines with which they work. An A4A spokeswoman says that her organization supports these proposed rules.

There’s less likely to be agreement on a list of smaller but nonetheless noteworthy rule changes. For example, the DOT wants to compel large travel agencies to adopt minimum customer service standards, which would include responding promptly to complaints and offering prompt refunds.

The government also wants to ban the preferential ranking of certain carriers’ flights over others without disclosing the bias, which leaves air travelers with the impression that they’re seeing the best available fare options. Travelers often assume that they’re being allowed to compare all airlines and that search results on Web sites such as Expedia, Orbitz or Kayak are impartial. These rules are likely to face opposition from the major online travel agencies, although the benefits to customers would be difficult to deny.

“The biggest winners here will be the passengers, who are tired of ugly surprises, and the airlines that have the fewest hidden costs,” says Michal Ann Strahilevitz, a marketing professor at Golden Gate University in San Francisco. In other words, carriers such as Southwest or JetBlue, which offer more inclusive prices, will get a lift if and when these rules go into effect. And the rest might have to come up with new fees to cover their losses.

But a lot can happen between now and Aug. 21, when comments are due. Only sustained support for air travelers in the form of public comments will reassure the DOT that these rules are necessary, and that the metamorphosis will improve the air travel experience.

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54 thoughts on “Will new airline regulations help passengers — or hurt airlines?

  1. A big yawn this morning. The proposals do not address extreme uncomfortable seating in coach and does not have a single passenger compensation rule like EC261. Might as well ask US passengers what they really want in a website forum and save hundreds of quite useless pages.

  2. This sounds like a great idea, but rather than more legislation and government bureaucracy, let the free market come up with it.

    If someone could design a travel website that lets travelers pre-determine all their requirements, and then search with all the optional services that would be needed to match the travelers needs, I’d give it a try.

    I know I am traveling from DEN to LAX on June 20. I’ll have a checked bag, one carry on and one personal item. I want an aisle seat. I want to leave in the evening. I enter the search parameters and let the website check availability, crunch the numbers and display the total including optional fees, and the required government fees and taxes and give me my options.

  3. “At the heart of the proposal is a requirement that airlines and ticket agents reveal fees for certain services associated with airline tickets at all points of sale. The DOT defines these as a first and second checked bag, a carry-on item, and advance seat assignment.”

    A resounding AMEN! to that requirement. My biggest peeve with booking a ticket is with the lack of disclosure of fees for advance seat assignment. Note: don’t go touting Southwest as the answer to that problem, because I didn’t see it as helping us get off the ground more quickly than a legacy carrier in the 4 segments I flew last month.

    I’m thinking of all the stories that *wouldn’t* appear on this site if all the fees were disclosed up front, during the booking process, rather than having to be researched separately, with several windows open, and hoping that the process didn’t time out before the advertised ticket price disappeared.

  4. Sometimes things need to happen one step at a time. I see these proposals as being positive and addressing of most of the complaints that I have about airline pricing and sales practices. After the DOT makes a decision about the proposed regulations, I’m sure that other regulations will be proposed that will deal with the issues that you have mentioned.

  5. As far as I know this is the third NPRM regarding Passenger Protection. What are you waiting for?

  6. Seems like no one in Congress has the cajones to address ridiculous seating in coach.

    And, if you missed it…a “service dog” caused a cross country flight to have an emergency landing.

  7. Southwest may not get you off the ground any quicker, but you know up front that your first two bags will always be free and that once in the air, they are not going to nickle and dime you for beverages and snacks. They also give you a little more seat room than most other carriers.

  8. In order: I don’t need to have my bags fly free – I don’t bring that much stuff. I like the peanuts on WN, but I get beverages “free” on UA and DL, which are the 2 other carriers I regularly fly. I found the 17″ wide seats on WN terribly uncomfortable – and I’m an “average” sized person. My husband didn’t have any more knee room than on a traditional economy seat on UA or DL, and no options to purchase a more comfortable seat.

    On the plus side, the people seemed more cheerful in line and the flight attendants were uniformly awesome.

  9. I’m just wondering how long until an allergy forces an emergency landing. I was on a recent flight where someone sitting next to a service dog ended up with watering eyes and sneezes for an entire cross-country flight.

  10. I’m of the mind that if you legit need a service dog, you would plan to bring a “doggie diaper bag” for it. The woman in this story did not have anything to clean up doggie mess.

    Therefore, I conclude it is a FAKE service dog and/or an “emotional support animal” which is the biggest load of crap since everyone having autism.

  11. Jeanne, the 17″ wide seats are found on all Boeing narrow body jets. Boeing uses the same dimensions for their narrow body fuselage that were used back in 1958 on their original 707 jet. So if you fly economy on a 737 or 757 aircraft on any airline, your seat will be 17″ wide. Economy seats on Airbus narrow body aircraft are 17.75″ wide, a slight improvement.

    I always thought that Southwest provided greater seat pitch than their legacy competitors. Some quick research on seatguru.com showed that this is not the case regarding legacy airlines. The Boeing 737 economy class seat pitch for Southwest, American and United is 31″. For DL it is 30 or 31″ depending where you sit. For Spirit Airlines, it is a very uncomfortable 28″. I know that Spirit does not fly into Omaha or Lincoln, but I thought that other readers would be interested.

  12. From NBC News:

    Passengers said that the large dog went to the bathroom in the plane’s aisle as many three times, making people nearby physically ill.

    The second time after the dog pooped they ran out of paper towels, they didn’t have anything else. The pilot comes on the radio, ‘Hey, we have a situation in the back, we’re going to have to emergency land’.

    This is what happens when some people are more special than others and when trying to be politically correct is defined by a few.

  13. You’re kidding about the legroom on WN, right? Since they changed to the new Evolve (or “Devolve”) seating, they added several rows of seats to the planes, and the seats are terribly cramped! It’s the same as Economy minus on the legacies. On UA, I can get Economy Plus seating, which has much more legroom and width. Because of this, I only fly WN for short hops of 2 hours or less.

  14. I’m a free market person as well. But even under free market theory, there are some constraints, the single biggest one being an adequate flow of factually accurate information. Industries which are opaque frustrate the free market.

    The reason is that without this information, consumers cannot make rational choices, which is the bedrock principle of free market economics.

  15. The paper towels came from the FA. There’s video of this woman walking the dog up and down the aisle…

  16. SOMEBODY should have had their nose rubbed in it, and I don’t mean the dog. I wonder if anything will be done to “Ms. Entitled”?

  17. But its not.

    Did you know that websites like orbitz give preferential listings? I didn’t.

    Can you calculate the final cost of a plane ticket (taxes and mandatory fees) from the base price? I can’t

    Did you know some airlines charge credit card processing fees? I bet most don’t know.

    Did you know that some airlines charge extra for an advance seat assignment? I best most don’t know.

    I submit that this is akin to any other disclosure requirement that most industries have, because the average consumer is 1)unaware of these items and 2)don’t even know to ask.

    It would never have occurred to me that if I don’t check-in online that I would have to pay an extra fee. I wouldn’t have known to even look, as that’s so far outside of the norm.

    Weighing the economic equities, the only economic costs to the a business by making adequate disclosure is the lost of economically inefficient revenue, i.e. revenue derived from consumer lack of information.

  18. No. You are mistaken. All that information IS available and could easily be programmed.

  19. I agree with you that the information IS available and COULD be easily programmed. But it’s not and there seem to be some financial incentives to the airlines to NOT do so. Preferential listings being one example. Another example is that one needs to do all that research ahead of time, or end up opening multiple search windows in real time while time runs out on the chosen fare(s).

  20. Thanks for doing the research for me and for other readers. Numbers are a far more objective measure. I do recall reading that WN “upgraded” their seats recently to get more rows on a plane and that pitch has decreased to the same as the legacy carriers. It just seemed more cramped to me, somehow, which is subjective and not measurable. :)

  21. It’s not going to be the airlines. I’m talking about a third party site. Then the problem is you still aren’t getting a fair comparison because Southwest won’t allow it to happen.

  22. The article I read didn’t define the type of service the dog provided. There are legit dogs out there. I’ve flown with vision service dogs for blind folks, and I’m happy they are allowed on the plane.

  23. We believe in free market standards but it sounds like more regulation in defining service animal is needed.

  24. True – still stuck with multiple windows. And I would mentally add $12.50 to each leg flown with WN, since “C” boarding passes mean “Center” seats.

  25. I’m opposite. I think about how I’m paying for a “free” checked bag that I don’t check and then check other airlines and find a cheaper fare.

  26. I think what Mr. Farrow was saying is that do you think that people have not considered this concept? Ie, a third party website that lists prices all in? If you agree that this has happened in the era of a billion web sites, what do you think the limitation is to your perfect site? Might it be the difficulty in accessing full and accurate pricing across companies? Might it be that the databases that contain this information is in control of the people doing the selling? Ie, nobody is incentivized to share this information with you. People can invent a million sites that compare “hundreds of rooms” or “hundreds of flights” but none of them can provide full and accurate pricing info. If you figure out how to access that information across all of these companies, then you will be a rich man. Or you may figure out that you will be richer by just selling the products that those same companies pay you more to sell. Ie, the supplier is pushing the demand. and in that scenario, even the invisible hand of the free market needs to be held a little with government regulation.

  27. I’m glad you agree that the current crop of third party sites are lousy and if someone could make them work properly they would be rich. That actually supports what I’ve been saying. So perhaps there is a need for it, unfortunately I’m not going to be doing it.

    Mr. Carver said the information is not out there. I’m saying it is. What information is not spelled out somewhere? Everything he mentioned is.

    Government fees and taxes are confusing and difficult to calculate, but not impossible. That is hardly the fault of the airlines.

    Preferential listings? End the practice, no argument there.

  28. Yep, think we are pretty much in agreement. I do believe that the information “exists”, but the algorithms extremely complex and I think also highly dynamic. Then again, companies like amazon manage inventories for tens of thousands of third party suppliers and millions and millions of products and they manage to get it done. but then again, they are incentivized as they get a % of every item sold rather than some fixed fee. in any case, i agree in principle, but also do think that access to this information is limited in real-time mitigating the ability of companies to sell these flights in a way that makes them money and saves us money.

  29. Does anyone have Jeff Bezos’ cell?

    If Amazon got into the business, I suspect the overhaul would happen.

  30. It would be a lot easier if Congress makes law requiring airlines to create INCLUSIVE fare types. By this I mean a fare that includes one piece luggage, one personal item carry-on and advance seating reservation.

  31. Easier, but potentially a legal overreach of Congressional power.

    Edited. I take that back. Congressional power to regulate airlines seems greater than other industries.

  32. Let me clarify what I mean.

    Can the information be obtained? Yes. I can also obtain the nutritional information regarding the breakfast cereal that I had this morning. I can also calculate the interest that I pay on my credit card. However, in these cases, obtaining the information is difficult for the consumer. That’s why we have consumer disclosure laws. The market proves itself inadequate and inefficient in these cases. Thus consumers must spend time and money to obtain such simple information.

    We then balance the economic interests.

    One one hand we have the merchant that has all of this information readily available. The only economic benefit of non-disclosure is to have ignorant consumers. Hardly a free market goal.

    On the other hand, we have consumers who will either 1) remain ignorant, or 2)divert income to become informed; income that could be spent on more economically beneficial enterprises.

    Thus, consumer disclosure laws generally fall four square within conservative free market economic principles.

    Put it this way, any business practice which relies upon ignorant consumers is an economically inefficient practice. And as we all know, economic inefficiency is the bane of the free market.

  33. when ever does regulation help anyone ?
    Anyone who thinks this will make things better is an absolute moron.
    + it will add to costs & guess who’ll wear those costs.

  34. Seating is going to get tighter. You should see all the new thinner seats without any padding !!!
    Compensation leads to higher fares. You can’t have it both ways.

  35. Remember I am only advocating that airlines must have an airfare that is inclusive. I am not advocating that ALL fares must be inclusive.
    Those who want to search and buy inclusive fares may be able to filter for them and not waste time with other type of fares (works like an HOV lane or something like that).

  36. Speaking of a load of crap…

    Aren’t service dogs supposed to have special official looking collars? Orange for visibility? The dog in the picture just had a regular dog leash and that’s it.

  37. I certainly hope not. I’m 6′ 1″ and was once on a charter flight with a 28″ seat pitch and the claustrophobia was unbearable. I cancelled my return flight on the charter airline and flew back on Delta.

  38. ATPCO is the company that collects and distributes the airline data reqarding fares, service fees, ticketing fees, optional fees, etc.

    There currently is a way to distribute these data to all parties involved.
    Some airlines do not provided all the necessary baggage data, yet.
    Many airlines still have to provide their (optional) ancillary fees but there is a structured way to do so already.

    The real incentive here is to get agents to sell ancillary services and not necessarily to disclose them to the window shopper in an easy way so they can compare :)

  39. It seems this was an “emotional support animal”, not a real service dog…
    Service dogs are usually very well trained.

  40. Yes, they usually wear a vest or harness identifying them as service dogs. However, there are many people who claim their pets as service dogs with just a doctor’s note. A well trained service dog sits at their masters feet, aren’t walked up and down the aisle and are trained on their digestive habits. I have flown on flights with true service dogs and worked with a gentleman who was blind and had a wonderful Lab from Guide Dogs for the Blind. I would put money on that dog in the article not being a true service dog.

  41. When are we getting planes with literally standing room only? You get a board to lean against and a handhold bar on each side. You’re not comfortable flying like that? Be ready to pay a “premium” for an actual seat.

    They already exist. Think they are called the saddle seats. Ryanair is proposing no seats at back of aircraft, to bring costs down. On short flights it would be fine. What’s the difference between this & standing in a toilet queue on a flight for 1/2 hour anyway ?

  43. with new thin seats, 28 inch pitch will be like the old 31 inch pitch.
    The big question is, with new thinner seats, will seat pitch be able to go any lower than 28 inch ?
    & can’t see any reason why 1/2 the aircraft can’t be 25 inches (the old 28 inch with thicker seats) for short people, kids etc. Many races are very short, eg Asians.

  44. Seat pitch is defined as “the distance from any point on one seat to the exact same point on the seat in front or behind it”. I don’t think that thinner seat cushions and backs will have any effect on legroom.

  45. think about what you’ve just written & you’ll realise how silly it is !!!
    If seats are thinner, you’ll have more room at same seat pitch !!!

    (otherwise there would be no benefit, apart from weigh, in having thinner seats)

  46. Tripadvisor has much of this functionality.

    But in addition to that, even under the current regime, there’s always the option to cancel your transaction. It’s a huge hassle to click through the website, go to an agency (or better yet, the airline), enter your data, and then see that they have a bunch of bag fees, etc. But the problem remains that many aren’t notified of these bag or seat reservation fees until check-in. By then, it’s too late. You can’t cancel and you have little hope to get a better fare at the last minute.

    There rarely is a place on a website that sums up all the fees. They’re squirreled away in various places. You have to go to baggage to get a list of the baggage fees. To check in to see how much to reserve a seat. Etc. Do they charge to use a credit card? That WILL be displayed at time of purchase (since you’ll see that fee up front) _OR_ they may hide it in the ticket price.

    Which, ironically, is what a lot of people here want: If a company charges you more to book with a credit card and they don’t tell you that you could save money by going to the airport to pay cash, that’s a lost opportunity for you to save money.

    Me personally, unless the charge is outrageous, I’m using the CC. I get some protection if the flight is cancelled or the airline goes out of business or (God forbid), I die (my Amex includes a nice life insurance policy for the flight.)
    Plus I get FF points (oops, shouldn’t have said that!)

  47. Read the definition seat pitch slowly and carefully. You will then realize who is silly.

  48. Mate, think about what you are saying. Don’t you understand. Obviously not.
    If a seat is thinner, the seat pitch can remain the same, but legroom increases by the difference between the old thick seat & the new ultrathin seat. Why do you think seat manufacturers like Ricaro are trying to make seats incredible thin, but strong enough to withstand constant use for 20+ years.

    Thinner seats means more seats can be put on aircraft up to max certified. Manufacturers will certify more seats on aircraft if seats can be thinner.

    You don’t measure seat pitch from a point in back of seat.

  49. Also, the new seat backs are much higher, which lead to more claustrophobia for me personally since I can’t see over them. The carryon space under the seat in front is dramatically less for aisle seats. The seat back pockets have been effectively removed. Etc.

    One of the only reasons I take Southwest is that I live in a market where I’m going to get a layover in either ATL or CLT on a legacy, adding hours and potential delays to any trip I take. If this ever changes, bye bye claustrophobia.

  50. Agreed. I can’t think of anything good about the new WN seats. I feel your pain. I am captive to WN for flights to So Cal out of SJC.

  51. do u realise your mistake now ?
    Put another way, if nothing changes (no change to seat pitch) except take 2-3 inches out of a back of a seat, you get 2-3 inches more legroom.

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