The Department of Transportation (DOT) has long been an outlier in the world of general consumer protections. Prior to Secretary of Transportation Ray LaHood’s proclamation that DOT had enough of the delays that the airlines continued in dealing with tarmac delays, the only consumer issues covered by DOT were denied boarding compensation (bumping) and lost luggage rules. Otherwise, customer service was the province of the airlines themselves.
This year, the DOT created the Advisory Committee for Aviation Consumer Protections (ACACP) chartered by Congress. This committee, unique in U.S. governance, makes recommendations directly to the DOT Secretary, who is required to report to Congress about his actions on each recommendation.
ACACP, a super aviation advisory committee of sorts, is made up of only four members. Lisa Madigan, the Attorney General of Illinois; Charlie Leocha, Director of the Consumer Travel Alliance; David Berg, Chief Counsel to Airlines for America and Deborah Ale-Flint, Director of Aviation for the Port of Oakland, are the current members of this committee.
This advisory committee provides the consumer representative, together with a powerful consumer-oriented voice from outside the world of airlines and airports in the presence of Lisa Madigan, an equal voice with the two most powerful interests in the transportation industry: airlines and airports.
Today, with the proliferation of ancillary fees and problems consumers face trying to make sense of airline pricing, combined with big-data-driven marketing schemes in websites and DOT’s best-in-class consumer complaint system, DOT is in position to become a leader in consumer protections and set an example that the Federal Trade Commission (FTC) and other agencies can follow, instead of the other way around.
Here are three major areas where consumer protection may be changed.
Airline price transparency
Just as Secretary of Transportation Ray LaHood courageously declared, enough is enough with the airline stalling tactics when dealing with tarmac delays; he can put an end to the half-decade of airline practice of hiding ancillary fees, especially seat reservation fees and baggage fees. Consumers deserve to know the full costs for their travel basics and be able to purchase that service anywhere airlines choose to sell their tickets.
Powerful debates have been raging for almost four years about disclosure of airline ancillary fees. Consumers want to know the full cost of travel so they can find the best deal. Travel agents want to be able to inform their clients of all charges and fees and allow them to purchase their entire travel package at one point of sale. Corporate travel managers need the costs of baggage, seat reservations and other fees in order to properly budget and reimburse workers who travel.
However, most airlines still maintain procedures that mislead the public about the full cost of travel by only publishing airfares without passenger-specific, transparent seat reservation or baggage fee information.
I believe that DOT is about to once again say, “Enough is enough.” In a nation that serves as the poster child for the free market, it is about time that airlines disclose their full prices and fees so that consumers can compare full basic prices and make educated decisions. And, so that the free market is allowed to work.
Disclosure of what Internet offers are “sponsored”
With the growth of the Internet as a forum for researching travel prices, DOT has initiated a study that may become a rule requiring travel agents to disclose when listings have been modified by payment, or sponsored.
The FTC has been considering updating its guidelines for disclosure of when search website results have been influenced by payment. Since travel is the largest segment of the Internet marketplace, the current action by DOT to construct a framework for Internet placement transparency goes hand-in-hand with FTC efforts and may end up leading the way to better online pricing transparency for consumers.
Dealing with consumer complaints
Over the past decades, DOT has developed an effective consumer complaint system. Recently, DOT began accepting complaints online. Not only has this online complaint system made it easier for consumers to register problems with the air transportation system, but it has made forwarding complaints to airlines and adding to the DOT complaint database easier.
When studies to examine other governmental systems of complaint resolution began, the DOT system was discovered to be one of the best available in terms of collecting complaint data and identifying trends in their industry. Some problems were identified with communication between DOT and consumers; however, DOT is planning to move forward with changes in the coming year to improve communication with travelers and enforce current complaint resolution rules that require airlines to acknowledge a written complaint within 30 days and send a substantive response within 60 days of receiving the complaint.
This combination of improved DOT communication with consumers and enforcement of complaint reporting rules will create one of the best complaint resolution systems in the federal government.