The U.S. Department of Transportation (DOT) has proposed a new rule requiring U.S. airlines to report more information on the amount and types of fees they collect from passengers, as well as the number of checked bags and mishandled wheelchairs they record.
According to the DOT, its proposed new rule would revise airlines’ current reporting requirements to improve data collection on the amount they receive from different, specific types of fees.
“Our goal is to improve the quality of data we collect from airlines and make airline pricing more transparent,” says U.S. Transportation Secretary Ray LaHood. “In an era of rising fees, passengers deserve better information about how airlines are performing, particularly when it comes to fees, baggage and accommodating passengers in wheelchairs.”
U.S. airlines currently submit quarterly reports on their revenue from baggage fees and reservation-change fees to the DOT’s Bureau of Transportation Statistics. Airlines received $3.4 billion from baggage fees and $2.3 billion from reservation-change fees in 2010.
However, under current rules, revenue from seating assignments and on-board sales of food, drink, pillows, blankets, entertainment, or any other ancillary items are reported in larger, combined categories and cannot be identified separately.
The Notice of Proposed Rulemaking (NPRM) issued by the DOT on July 15 proposes to require airlines to report 16 additional categories of fee revenue in addition to their baggage and reservation change fees. According to the DOT, identification of all ancillary fees and the amounts collected by each airline would improve information available to the public and help determine the impact on the U.S. Airport and Airways Trust Fund of the increasing use of these fees.
Collection of data on fee revenue was recommended by the U.S. Government Accountability Office (GAO) in a July 2010 report.
The DOT says its proposed changes to baggage-reporting requirements will make the information more useful to airline passengers. Currently, the DOT compares the number of mishandled baggage reports to the number of passengers enplaned. However, because passengers are checking fewer bags as a result of higher baggage fees, the DOT thinks passengers might have better information on airline service if the comparison is based on the number of checked bags.
In 2010, carriers reporting on-time and mishandled baggage numbers posted a mishandled baggage rate of 3.57 per 1,000 passengers, an improvement over 2009’s rate of 3.99.
Additionally, says the DOT, many air travelers who use wheelchairs have indicated to the department that they are reluctant to travel by air due to concerns that their wheelchairs or scooters will be delayed or the equipment may arrive damaged. For this reason, the DOT proposes to require more information about how well U.S. airlines meet the needs of passengers with mobility disabilities, in order to understand and address any problems better.
The DOT says the rulemaking proposed on July 15 is a part of the department’s broader effort to strengthen airline passenger rights and improve the airline-service information available to the public. It is also consistent with the recommendation of the U.S. government’s Future of Aviation Advisory Committee to bring greater transparency to airline pricing, including ancillary fees, according to the department.
In December 2009, the DOT finalized a rule that, among other things, prohibited lengthy tarmac delays for U.S. domestic flights. In its first 12 months, the rule nearly eliminated extended tarmac delays. However, many industry observers believe another, unwanted effect of the rule has been that U.S. airlines now cancel a massively greater number of flights than they did before the rule went into effect, so that they do not run the risk of incurring high penalty fees for keeping passengers stuck in aircraft sitting on the tarmac for more than three hours.
The DOT also issued a final rule in April 2011 that expands the current ban on lengthy tarmac delays to non-U.S. carriers. The rule also requires airlines to reimburse passengers for bag fees if their bags are lost; provides consumers involuntarily bumped from oversold flights with greater compensation; and requires carriers to disclose hidden fees.
Comments on the NPRM for the proposed new fee-disclosure rule can be submitted to the Federal Docket Management System at www.regulations.gov, Docket ID No. RITA-2011-0001. Public comments will be accepted through September 13, 2011.