By Nathalie Voit
As part of his July 9 executive order on promoting competition in the American economy, President Joe Biden directed the Department of Transportation (DOT) to make consumer-friendly changes to the airline industry. The order was part of a more extensive set of initiatives to break down consolidation in industries like banking, tech, and the pharmaceutical market.
The provisions call for a set of popular reforms to be carried out in the industry, like issuing refunds of checked baggage fees for lost luggage to the broader edict of promoting competition in the air travel industry.
“This is the first time since deregulation that we have a White House recognize that we have an industry lacking competition, and consumers are paying the price as a result,” said Kurt Ebenhoch, the executive director of Travel Fairness Now, a consumer advocacy organization that supports more transparency and competition in the airline industry. “We hope it would have a ripple effect on the decisions the Department of Transportation makes.”
The mix of proposed guidelines issued to the DOT includes making flight information more publicly available and transparent for travelers. Currently, consumers have to scan through several websites to find the best rates, where prices may vary from site to site. The administration recommended the creation of a central database or website where consumers can easily compare trip fares.
The order also directed the DOT to include flight information for “new or lesser-known” airlines, which lack the competitive advantage of longstanding industry giants like American Airlines and Delta.
According to the order, the airline industry has become too consolidated following a series of significant mergers and acquisitions. Since 2001, the industry has seen at least eight notable mergers and acquisitions, events that have culminated in the era of the “big three legacy carriers” Delta, American, and United, reported the New York Times. The domination of the “big three” in air travel has created an anti-competitive environment hostile to consumers, the administration argued.
The order also calls on the DOT to report airlines refusing to refund canceled flights during the pandemic. According to the New York Times, airlines are sitting on a vast swath of unused flight credits ($10 billion to be exact), a move that has prompted an outcry from some senators in Congress. The agency has already instructed nine airlines to issue clear guidance on refunds in the event of a cancellation and is pursuing a formal complaint against Air Canada for refund violations.
In addition to federally mandated refund requirements for canceled flights, the order also charges the DOT with oversight of refund requests for undelivered services, like spotty Wi-Fi on a flight. The provision also considers lost-bag rights, which may be compensated up to $3,800 on domestic flights. In the case of fees, the order stipulates fees must be delineated online before booking.
“Air travel is a vital American industry that has withstood a hard period, and travelers deserve to have their lives, their rights, and their pocketbooks protected every time they fly,” Pete Buttigieg, the transportation secretary, told the New York Times. “Our administration has taken actions to protect air travelers, including issuing a proposed rule requiring refunds for services airlines promise but do not deliver, and appointing four strong leaders to our consumer protection committee. We will continue to protect air travelers at each step of their journey.”
