Travelore News: Major Airlines Urge Trump Administration To Abandon Passenger Compensation Review Of Flight Disruptions

Major U.S. airlines on Tuesday asked the U.S. Transportation Department to abandon a review launched by the Biden administration over whether carriers should be required to pay passengers compensation over flight disruptions

Airlines for America, a trade group representing American Airlines, Delta Air Lines, United Airlines, and others, urged the Trump administration to end the review launched in December to take comments on whether airlines in the United States should provide cash to compensate for carrier-caused disruptions like they are required to do in the European Union and Canada.

"Airlines do not need further incentive to provide quality service," the group wrote, arguing that USDOT lacks legal authority and that the requirement would drastically boost airlines' costs and hike ticket prices.

The International Air Transport Association representing airlines worldwide separately criticized the idea saying required compensation programs "have become wealth transfer tools that have cost airlines billions of dollars without any meaningful reduction in flight disruptions."

Spirit Airlines said the idea is so extreme "it might encourage carriers to re-evaluate when they proceed with flights that should have been further delayed or canceled when potential safety related concerns exist."

USDOT in December sought comment on whether airlines should be required to pay $200-$300 for domestic delays of at least three hours, $375-$525 for six-hour delays, and $750-$775 for nine-hour delays.

Then-Transportation Secretary Pete Buttigieg said in December that compensation rules for delays "would change the economic incentive in a way that motivates airlines to do more."

In May 2023, President Joe Biden said his administration would within months write rules requiring airlines to compensate passengers for disrupted flights.

Airlines must refund passengers for canceled flights, but are not required to compensate customers for delays.

Major carriers have committed to paying for meals, hotel stays and other expenses when they cause significant flight disruptions.

Last month, a U.S. court blocked the Biden administration's 2024 rule requiring upfront disclosure of airline service fees, saying USDOT had not complied with procedural rules.

Reporting by David Shepardson; Editing by Bill Berkrot

White House: New Rule Will Show ‘True Cost’ Of Plane Tickets

WASHINGTON (AP) — President Joe Biden announced a new initiative Monday that would eventually allow consumers to see a more complete price on airline tickets — including baggage and change fees — before they buy, as the White House continues to search for ways to lower costs for Americans amid persistently high inflation.

The White House says the proposed rule from the Transportation Department will prevent airlines from hiding the “true cost” of airline tickets, which would help consumers save money up front and encourage more competition among airlines to offer better fares. The requirement will apply not only to airlines directly but also to third-party search sites such as Kayak and Expedia.

“You should know the full cost of your ticket right when you’re comparison shopping,” Biden said Monday, citing fees charged by airlines to check luggage or to seat families together. The new rule, the president said, will help consumers “pick the ticket that actually is the best deal for you.”

Airlines made nearly $5.3 billion in baggage fees and nearly $700 million on cancellation and change fees last year, according to Transportation Department figures. Airlines charge a variety of other fees for extra legroom and other perks that are not tracked by the government.

A trade group for the largest U.S. airlines said carriers already disclose terms and the total cost of a ticket. “This includes transparency regarding taxes and government fees on airline tickets, which account for more than 20% of many domestic one-stop, roundtrip tickets,” said Katherine Estep, a spokeswoman for Airlines for America.

The proposed rule seeks to target a typical situation faced by consumers where a ticket price is listed on an airline or search website, but with information often listed elsewhere about any additional airline fees, such as for checking or carrying on a bag, getting a guaranteed seat next to your child or changing or canceling a flight — fees that vary widely by airline and could quickly tack on up to hundreds of dollars more to a price of a ticket after the initial purchase. Under the proposal, that information would be made available upfront when the quoted airfare is first displayed.

The fare information would be required for all commercial flights to, within, and from the United States.

The proposal dates back to the Obama administration and was scrapped in 2017 by then-President Donald Trump after airlines complained that it was unnecessary and would incur significant costs. It must now go through a 60-day comment period before final approval.

The proposed rule comes as tension grows between the Biden administration and the airlines, with each blaming the other for an increase in canceled and delayed flights this summer.

The Transportation Department also began posting information to help consumers learn what each airline provides when flights are canceled or delayed for reasons within the airline’s control. That prompted several airlines to update policies around finding a new flight and covering hotel and meal expenses for stranded travelers.

Biden made the announcement on Monday afternoon at a meeting of the White House Competition Council, established last year as a way for his administration to find cost-saving measures for consumers. It was the third meeting of the group, chaired by National Economic Council director Brian Deese.

“Capitalism without competition isn’t capitalism,” Biden said at the event, held in the State Dining Room at the White House. “It’s exploitation.”

At the meeting, Biden also pushed other federal agencies to take similar cost-saving actions, particularly by increasing transparency on hidden fees that can balloon the true cost of goods and services.

One example is a proposal from the Federal Communications Commission that would require internet service providers to better outline fees and charges on what the administration calls a “broadband nutrition label.” And the Agriculture Department on Monday will also unveil new actions meant to encourage competition in various agricultural markets.

The administration has taken similar actions when it comes to bank and credit card fees, which the White House says have saved consumers $3 billion annually compared to before the COVID-19 pandemic.

US Plans To Make Airlines Refund Fees If Bags Are Delayed

The Transportation Department will propose that airlines be required to refund fees on checked baggage if the bags aren’t delivered to passengers quickly enough.

The proposal, if made final after a lengthy regulation-writing process, would also require prompt refunds for fees on extras such as internet access if the airline fails to provide the service during the flight.

A department official said the agency will issue the proposal in the next several days, and it could take effect by next summer.

The proposal will require refunds if airlines fail to deliver a bag within 12 hours of the passenger’s U.S. flight touching down or within 25 hours after an international flight.

Current regulations require refunds only if bags are lost, although airlines must compensate passengers for “reasonable” incidental expenses incurred while their bags are delayed. The government does not know how often airlines keep fees even when bags are significantly delayed.

The bag-fee proposal is the first of several airline-consumer regulations coming from the Biden administration, according to a senior Transportation Department official, who spoke on condition of anonymity to discuss a proposal that hasn’t been made public.

Last year, more than 100,000 consumers complained to the government about airline service. Refunds were the biggest gripe, although most claimed airlines refused to give refunds to consumers who canceled trips because of the pandemic. The Transportation Department is seeking a $25.5 million fine against Air Canada, but has not taken action against other carriers over refunds for canceled flights.

In 2019, the last full year before the pandemic, passengers paid U.S. airlines $5.76 billion in fees on checked bags, according to the Transportation Department. That dropped to $2.84 billion last year, when travel slumped because of the pandemic. The figures do not include fees for carry-on bags.

For many years, customers could check one or two bags on almost any airline without paying a fee. That began to change during a travel slump caused by the financial crisis of 2008. Now, most U.S. airlines other than Southwest charge even for a single bag, although fees are usually waived for customers who buy high-fare tickets or carry the airline’s credit card.

American Airlines generated $2 billion from checked-bag fees over the past two years, followed by Delta Air Lines and United Airlines, each around $1.5 billion. Because of their smaller size, discount airlines including Spirit and Frontier reap less money but get a higher percentage of revenue from the fees.