DOT action on consumer protection likely

Mark Pestronk

Q: The U.S. air travel industry is regulated directly or indirectly by the DOT. One of the DOT’s main jobs is consumer protection, but recent administrations have done little to protect the consumer. Do you think President Biden’s new appointee, transportation secretary Pete Buttigieg, will do more for consumers?

A: In the five months since he took office, Buttigieg has advanced very few aviation-consumer initiatives. Instead, he has been concentrating on environmental policies, the aging travel infrastructure and keeping travel consumers safe from Covid.

However, the status quo may soon change. A month ago, President Biden issued an executive order called “Promoting Competition in the American Economy.” It directs the heads of most major government agencies to adopt policies and regulations to promote competition. One of the lengthiest lists of directives is for the secretary of transportation.

  • Related story: Biden’s quick moves on travel policy may signal more aviation regulation

Interestingly, the directives for the DOT are as much focused on aviation-consumer protection as they are on “competition” per se. Here are some examples of what President Biden wants Buttigieg to get working on:

  • Enhancing consumer access to airline flight information so that consumers can more easily find a broader set of available flights, including by new or lesser-known airlines. It sounds like the White House wants a rule requiring all distribution channels to include all airlines, which would be a major change from DOT policy in effect since the early 1980s.
  • Ensuring that consumers are not exposed or subject to advertising, marketing, pricing and charging of ancillary fees that may constitute an unfair or deceptive practice or an unfair method of competition. This very broad mandate is really the same as the DOT’s existing statutory authority, but its inclusion probably signals a reemphasis on consumer protection.
  • Initiating a rule-making (within the next 90 days) that would require the provision of ancillary fee information to consumers at the time of ticket purchase, including baggage, change and cancellation fees. The Obama administration proposed a fee-disclosure rule, but it was rescinded after President Trump took office. Nothing in Biden’s executive order mentions travel agencies, but since agencies sell millions of airline tickets, the rule would apply to them.
  • Reporting to the White House Competition Council (within the next 45 days) on the secretary’s efforts “to address the failure of airlines to provide timely refunds for flights canceled as a result of the Covid-19 pandemic.” The DOT’s lack of action to enforce its cash-refund policy certainly contributed to this failure, so enforcement will need to be stepped up.
  • Proposing a rule (within the next 45 days) that would require airlines to refund baggage fees when a passenger’s bags are “substantially delayed” and other ancillary fees when passengers pay for a service that is not provided. By coincidence or not, the DOT came out with a proposal on this subject on the same day that the president issued his executive order.

In years past, whenever the DOT was given a deadline for action, it was routinely ignored, but I sense that change is coming. 

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