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Feb 08

Are Airlines About To Win Another Regulations Battle?

Scott McCartney writes a weekly column for the Wall Street Journal called “The Middle Seat,” which reviews current events in the world of airlines. The column alone is often worth the cost of the subscription, and yesterday’s piece was particularly interesting.

Goodbye Red Tape Road, Or Consumer Protections?

doofenschmirtz, red tape

Regulations? What regulations?

According to Mr. McCartney, the DOT and airlines are discussing eliminating certain regulations that either protect consumers or generate unnecessary burdens, depending on which side of the debate you fall.

I foresee an interesting battle of ideology versus popularity. On the one hand, airlines have powerful lobbies and can afford to battle for their own interests. But there’s an issue: Airlines represent excellent whipping boys for the public, and nobody wants to be known as the politician who allowed the airline to bump grandma from her Christmas flight. And going after regulations at the DOT level is particularly brutal since, as Mr. McCartney points out, the DOT is the main venue for consumer action.

Among the issues that they are looking at:

  • Weakening the tarmac delay rule*
  • Eliminating the mandatory 24-hour ticket grace period
  • Charging for wheelchair service
  • Allowing travel agent bias to show preferable fares and carriers to show prices before fees

Passengers consider most of those issues to be basic benefits that come with the cost of the ticket, whereas airlines see them as an opportunity to increase profits, arguing (often correctly) that many of these rules are unique to their industry. Changing regulations in the airline industry are certainly nothing new, but it’s rarely at the behest of a government agency whose job it is to look out for consumers.

What’s The End Game?

Traditionally, when it comes to the rules of the business, I have leaned slightly toward the airlines. They’re a business whose job it is to make money for their shareholders, not a public utility.

Having said that, there need to be some basic regulations put in place to protect passengers, who are subject to a contract that is essentially take-it-or-leave-it. Eliminating all safeguards for consumers is very different from allowing an airline to charge for bags or take away an inch of leg room. There is at least a reasonable alternative for the latter.

But the industry needs to be aware of something else: Nobody likes you. No industry has done such a good job of alienating both its customers and its own employees. There will never be a full customer strike, of course. Travel is often non-discretionary, so the airlines will always have some business. But do you really want to be have an employee who has to tell an elderly passenger that you can’t give them a wheelchair because they didn’t pay, or deal with a customer after they fat-finger a flight that they didn’t intend to take? Air rage is already a real thing. The airlines had better make sure that they don’t perpetuate it.

 


* No regulation has demonstrated the law of unintended consequences better than the tarmac delay rule, which forces airlines to return to the gate after spending three hours on the tarmac while waiting to take off. In theory, it makes perfect sense to allow passengers to get off the plane but, in practice, it has significantly increased the number of cancelled flights and protected very few people. There’s a reason that there’s a newspaper article every time a flight gets stuck on the tarmac for six hours: It happens so rarely that it’s considered newsworthy. By the three hour point, the airline almost always knows whether the flight is going to go, and if it isn’t, it has probably already returned to the gate.

 

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