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Jul 15

Shocker: The Airlines Lose A Round in Washington

I had a few other topics I wanted to talk about today, but they are going to have to wait a day so that I can discuss the new FAA reauthorization bill. And, before your eyes roll, I’ll tell you that there are a few pieces in it that might interest you.

The most important thing to know is that, in the constant battle between “consumers” and “airlines,” the consumers won this round. That’s stunning. Normally, proposals to regulate anything in regard to the airlines are shot down. But Wednesday’s bill contained a number of provisions that can be viewed as consumer-friendly. I’m going to pull a few pieces from the above Washington Post article and explain what they will mean to you.

What Was The Bill, Anyway?

Simply put, the Federal Aviation Aviation needed its programs funded and legal authority to be renewed. It was set to expire today. Congress-critters attached a number of provisions to the bill, which is common. Normally, though, the extras are dumped before the bill gets passed by the House and the Senate. This time, though, they made it through.

What Will You Get

Here’s a peek at some of what passed. Some of it is minor, but even “minor” is a loss for airlines.

Families Get to Sit Together

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It seems like common sense: If you’re traveling with your young kids, you want to be near them and strangers likely want to be away from them. Why would the airlines even question this one? Actually, their reasons make sense:

  • The airlines get fees for seat assignments. If you don’t have elite status or a premium ticket with an airline, there is a good chance that they are going to charge you for an advanced seat assignment. Otherwise, you are stuck with whatever you get 24-hours in advance, even if that means your family is sprinkled throughout the plane. It seems like an issue of simple fairness that you should be able to sit with your family. But for the airlines, it also seems like a question of fairness: Why shouldn’t they be allowed to determine which services they will and won’t charge for? It’s not as if they don’t give consumers the option to pick seats. Rather, it’s that many consumers don’t want to pay for them. If I’m going to be completely objective, I have to say that the airlines have a point.* There is something to be said for the Spirit model, where consumers can choose exactly what they want, no more, no less.
  • How does the airline implement such a policy? There may be an exception for extra legroom seats or class of service, but what happens when a passenger is forced to surrender an aisle seat for a middle seat? What about if that passenger paid for their aisle seat? The law of unintended consequences will be in full force.

The TSA Has To Do…Something. We’re Not Quite Sure What, Though.

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One of the big complaints about PreCheck is that its lines are frequently closed. While PreCheck passengers are supposed to get front of the line privileges when it’s not open, theory does not always translate to practice. So a law requiring screening lines to be open more is probably good. The problem is, who gets to decide the definition of “peak,” “high-volume travel times” and “appropriate airports (not to mention “every practicable effort”)? If it’s the TSA, don’t expect to see any changes.

As for the expansion of PreCheck, the issue is only partially the inconvenience of getting there. Subjecting people to an $85 fee and an “interview” also create a hassle factor. There is, of course, a simple solution to the problem: Let every passenger have PreCheck standards and sort out the ones who need more attention. The TSA failed 95% of its tests last summer, a number that rose from the previous year. We need security, but we need intelligent security. Seizing toothpaste is not the answer.

They Can’t Charge You If Your Luggage Doesn’t Get to You

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Seriously? This was even an issue? The airlines don’t understand why everyone hates them. Well, their asinine policies regarding luggage are one reason. How does “Well, your bags arrived two days late, but we’re gonna charge you for them, anyway.” sound to you? Yeah, me too. If the airlines don’t provide the service, which means not only getting your bags to your destination but also getting them there the same time as they get you there, they shouldn’t get paid for it.

What Didn’t Pass

 

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You’re just going to have to believe me that the above not passing is a really, really good thing. It doesn’t sound that way. We all want to be comfortable. We don’t want to feel like we are being overcharged. But again, the law of unintended consequences would kick into effect.

Make seats bigger? Perfect. I want to fly in comfort. I want to get their fast. And I want it to be cheap. But, as the old saying goes, you can have any two of the above, not all three (and, occasionally, only one). Why are seats small and cramped? Because consumers have demanded it. No, nobody marched on Washington with signs saying “We want smaller seats!” Rather, their purchasing patterns have indicated their preferences. The fastest growing airline in the country, as well as the one with the highest load factors, is Spirit, the deep-discount carrier that charges for everything you could think of. On the other hand, no “premium” airline, such as some of the attempts at all-business-class seating, has ever succeeded in the US. Not one. Heck, most people don’t even pay for the premium classes on their flights that are already available, and that premium economy class may only cost $10 or $20 more than a regular coach seat.

If the airlines were forced to give everyone a big, comfortable seat, the first thing that they would do is raise prices by 20-30%. There’s a reason that airlines were deregulated. Coach seating is less comfortable, but more people are able to travel than ever, thanks to the growth of discount carriers. It’s also not a safety issue, no matter how many times some expert says that cramped seats will cause Deep Vein Thrombosis. Just how many cases of DVT have their been over the past ten years, anyway?

But the bigger issue is the one that, on its surface, makes the most sense: preventing them from imposing fees that were not reasonable and proportional to the costs incurred. It doesn’t cost an airline $50 to carry your first bag or $100 to carry your second, so why should they be able to charge that? Well, because that’s the way the world works. Movie theaters charge $7 for popcorn that costs them pennies. Ballparks charge $10 for beer. For most people, I can’t imagine that they would want the government determining their profit margins. Whether we like it or not, airlines are publicly traded companies that have as much right as any other to try and maximize their profits. In fact, if you own a mutual fund, there’s a good chance that you are an owner of an airline stock.

It’s painful, but sometimes consumers are best off when they’re treated like  adults.

 


*And then there are those times when you choose your seats ahead of time to sit with your family and the airline changes the type of plane, throwing seat assignments into chaos.

 

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