American consumers are happy. U.S. airlines and travel advisors are livid. And the normally loquacious U.S. Transportation Secretary is speechless.
A move by U.S. authorities to make it easier for consumers to get refunds from airlines and to know how much their flights will cost has erupted into a political firestorm south of the border, with the kind of threats and lawsuits usually associated with a Donald Trump golf course development.
For those of you who’ve been distracted by things like the Stanley Cup playoffs or booking clients on trips to Thailand, here’s a recap.
The U.S. Congress has been debating new rules for airlines for some time. On 15MAY Congress passed a $105 billion bill that reauthorizes funding for the Federal Aviation Administration, which oversees air travel in the States. Within the bill, which goes on for more than 1,000 pages, are several changes regarding air travel and aviation, including two new rules for U.S. airlines.
The first is that carriers must provide full and automatic refunds if a customer's flight is canceled or delayed by more than three hours if travelling domestically, and six hours internationally.
"Passengers deserve to get their money back when an airline owes them, without headaches or haggling," U.S. Transportation Secretary Pete Buttigieg said in a statement. He said that includes tickets bought directly from airlines, travel advisors (the FAA legislation refers to them as “ticket agents”) and third-party sites such as Expedia.
ASTA has argued loud and hard that the rules are unfair to advisors, especially those at smaller companies that might have to refund customers’ tickets.
“Travel agencies are not positioned to float the kind of financial obligations that policymakers are strapping on their backs,” said Zane Kerby, President and CEO of ASTA.
Skift reports that a previous version of the FAA bill stated passengers would have to make a written or electronic request for a flight refund. The new language says pax won’t have to make requests for refunds if their flights are significantly delayed or canceled. Travellers can only receive automatic refunds if they don’t accept an alternative flight option or if they don’t respond to a request for one, Skift said.
Another rule in the FAA bill says airlines must disclose upfront fees for checked and carry-on bags, changing reservations, or canceling reservations. Any fees must be disclosed the first time that fare and schedule information is provided on the airline's website. Displaying prices via a hyperlink is no longer permitted.
"This ensures that consumers can avoid surprise fees when they purchase tickets from airlines or ticket agents, including both brick-and-mortar travel agencies or online travel agencies," the White House said in a statement on 24APR.
A group of U.S. airlines, including Alaska, American Airlines, Jet Blue and United, have launched a lawsuit against the government, claiming that the changes are illegal, and would confuse passengers.
The lawsuit describes the new rules as “arbitrary, capricious, an abuse of discretion and otherwise contrary to law,” according to a copy of the suit reviewed by Reuters.
Airlines for America said in a statement shared with Forbes that airlines already disclose all fees associated with air travel to consumers prior to purchasing a ticket. The group also said the new rules will “greatly confuse consumers who will be inundated with information that will only serve to complicate the buying process.”
The U.S. Department of Transportation says consumers are overpaying $543 million USD in fees annually, and that airlines are getting that additional revenue from consumers who are surprised by fees and "then need to pay a higher fee at the airport to check a bag,” Reuters said.
Buttigieg went ballistic over the lawsuit.
“We just issued a rule requiring airlines to inform you, before you buy a ticket, of fees they will charge you,” Buttigieg said on 14MAY in a post on the social platform X. “Now, the airline lobby is suing us, saying that if you have the right to that information it will ‘confuse’ you. For once, I am speechless.”
