As passengers swelter through a summer of airline delays and cancellations, PIRG Consumer Watchdog Teresa Murray advises: "Passengers, know your rights."
Here's hoping we'll have more rights soon. The U.S. Department of Transportation asked me to present to its Aviation Consumer Protection Advisory Committee's (ACPAC) meeting this week on how earlier access by consumers to better flight information will improve airline competition. A video of the full two-day meeting is available here but see Day 2-Morning for my panel focused on whether requiring airlines to provide more flight information, with fewer restrictions, earlier in the search process would increase consumer choice and further the recommendations made to the DOT in President Joe Biden’s 2021 Executive Order on Competition.
Spoiler alert! Yes, our view is that full disclosure of airline flight information -- no matter where or when consumers seek it -- would increase consumer choice and promote competition! You can download (pdf) my full slide deck here, but the slide pictured above was the money shot. Airline flight information has been public since 1929 but today airlines are hiding or restricting it to minimize consumer choices.
Again, full disclosure of airline flight information is neither a new nor novel idea! The ACPAC spent one day of its two-day meeting discussing the Executive Order's request for greater disclosure of ancillary (extra) fees and one day on what airline flight information means and includes. While the DOT had previously begun a rulemaking on ancillary fees, the day two discussion of what airline flight information means was new. I argued that it meant full fare disclosure, earlier in the flight search process and in all search channels. The need for consumers to receive full fare, route and schedule information while shopping around on search engine sites, online ticket agencies or anywhere is fundamental to competitive choices. Why? Because once the airline has captured you on its own site, it's way too late to shop around.
Today, at least one Big 4 airline doesn't disclose its prices on search engines or online ticket agent sites, only on its own site. Other airlines may restrict full fee information, which can only be found during the final purchase process, which is often completed on the airlines' own sites. That's too late to find the best price and choice.
The related problem discussed during Day 1 of the meeting was ancillary fee disclosure. Today, full fares are often dominated by these add-on fees. Additional fees include seat selection fees, fees for carry-on and/or checked baggage, flight change fees, family seating fees, etc. Discount airlines (called ultra low cost carriers) commonly low-ball the advertised price but count on the ancillary fees adding up on a drip, drip, drip basis. Hotels and concert ticket sites also use what's actually called DRIP pricing. We've commented on several important previous and ongoing DOT rulemakings concerning ancillary fees and related issues.
Also speaking on my panel were Paul Hudson, president of the PIRG-backed FlyersRights.org and Diana Moss, Ph.D., president of the American Antitrust Institute. Dr. Moss, in particular, made clear that the unchecked market power of the Big 4 airline oligopoly contributes to their ability to use anti-competitive tactics that leave consumers in the dark about better deals on other airlines. Following our consumer panels, each day the ACPAC heard from panels of airline and third party ticket agents, including search engines.
The White House fact sheet accompanying the Executive Order on Competition succinctly explained the airline problem:
The top four commercial airlines control nearly two-thirds of the domestic market. Reduced competition contributes to increasing fees like baggage and cancellation fees. These fees are often raised in lockstep, demonstrating a lack of meaningful competitive pressure, and are often hidden from consumers at the point of purchase. The top ten airlines collected $35.2 billion in ancillary fees in 2018, up from just $1.2 billion in 2007.
President Joe Biden's Executive Order itself laid out the actions DOT should take to help protect consumers and bolster airline competition:
• Help Consumers Find More Choices Of Available Flights
• Including By New Or Lesser-known Competitor Airlines
• Help Consumers Obtain Better Ancillary Fee Info, Including By Sharing Information Between Airlines And Ticket Agents
Along with other consumer advocates, we have engaged in a long-running debate with the airlines over their continuing failure to treat passengers fairly. Over the last 15 years, there have been a series of rulemakings at the DOT and a series of proposed and enacted pieces of legislation. The pandemic may have challenged the airlines, but don't forget that they received billions in bailouts without much to show for it. Consumer groups have had to fight for every step forward--for example, to force the airlines to actually provide cash refunds as required by law, not company scrip usable only on future flights and usually subject to planned obsolescence. The battle over letting families sit together for free -- it's a safety issue that can't be left to the market -- goes on. Worse than shrinking scrip are unsafe, shrinking seats.
The Transportation Department needs to act more decisively to complete and enforce rules that can make the skies friendly again.
I'll leave you with an email sent to me the night before my presentation from consumer law professor Jeff Sovern, which I couldn't squeeze in at the ACPAC meeting. It's a story told in three parts about his "daughter's Delta Airlines disaster: what happened to her suitcase?." Part 2: "When last we left my daughter, she was in Atlanta, bagless, and Delta was clueless about where it was." Part 3: "When last we left our intrepid adventurer’s story, she had arrived home, even if her bag had not."
No, I know it's not a story about airline flight information, it's a story about how unchecked monopoly power allows unfair treatment of consumers. And that's the point. There are a million of these stories. There'll be many more after this weekend's cancellation and delay debacles.
I'm excited that President Joe Biden has decided to make all markets work better by giving consumers more choices and holding entrenched monopolists accountable. For example, the FTC is solving competition problems by ensuring a right to repair your own stuff and investigating how middlemen known as pharmacy benefit managers (PBMs) now "vertically integrated with the largest health insurance companies" affect the price and availability of pharmaceuticals.
For too long, a cadre of powerful corporate interests convinced the courts that "big wasn't bad." That misguided view led to a massive wave of corporate consolidation and lack of enforcement of the antitrust laws. There's a change in the wind. Safe travels and I hope you and your bags make it on time.