This week, the US Department of Transportation announced that it was considering air passenger rule changes that offer protections in the case of delays and cancellations. Here’s why that might not work the way we hope.
US Department of Transportation (DOT) Proposes New Rule
In response to abysmal performance form US carriers this year, US senators and Department of Transportation Secretary, Pete Buttigieg, have put forward a new rule that will provide compensation for passengers that experience delays and cancellations.
“This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines,” said U.S. Transportation Secretary Pete Buttigieg. – Reuters
From ABC News, here are the details of what else the rule would cover:
- Changes to the departure or arrival airport
- Changes that increase the number of connections in the itinerary; and
- Changes to the type of aircraft flown if it causes a significant downgrade in the air travel experience or amenities available onboard the flight.
At least one of these, “changes in the number of connections” is already more or less covered in the contract of carriage as it would add a material change in the arrival time. As a rule of thumb, any change in arrival time can technically break the contract of carriage and free a customer from a non-refundable ticket, though the minimum standard is more than ten minutes but most airlines don’t put up a fight if it changes by more than 60 minutes.
As to a change in the departure or arrival airport, this would break the contract of carriage as well. However, there could be issues with co-terminals like New York City. For example, American lists the following cities where all destination airports are essentially treated as one. They may offer connecting flights from LaGuardia despite a JFK arrival:
- BWI – WAS (DCA, IAD)
- FLL – MIA
- SFO – SJC
- LAX – ONT – BUR – SNA
- EWR – NYC (JFK, LGA)
- HOU – IAH
Comparing Proposed Rule to EU 261/2014
According to reports, arrival times that are three hours late for domestic flights or six hours late for international flights will be subject to penalties. Europe does a better job, though more complex, with a sliding compensation level based on distance flown and delay incurred. They cap it at four hours. A short flight from Miami to the Bahamas has up to six hours to make the short journey before compensation comes into play while a domestic flight from Boston to San Diego (longer than Boston to Dublin) only has three hours of grace. The US rule should be adjusted for distance of flight or flight time, not whether a border is crossed.
The EU rule is pretty easy for compensation, but there’s also an issue of what happens once the penalty is incurred. There’s little incentive to then turn the equipment once the checks are essentially written.
I’m not aware of a change of aircraft (downgrade in product) being an explicit delineated compensation event in EU 261/2014, but a downgrade in class of service would be. This is where the US rule shines. For example, if a passenger specifically bought the Los Angeles-Miami route on American Airlines in domestic first class on a 777-300ER because they didn’t mind paying more for a lie-flat bed for the long flight, but an aircraft swap kept them in domestic first class but on a 737-800 – there’s no question that’s a different product than what the customer bought and they should be compensated for it.
Anticipated Problems With Proposed Rule
There are always unintended consequences to policy changes without the proper vetting and time to adjust the rules.
Because the proposed changes are based on arrival times, airlines will be best served to add to their flight times unnecessarily to avoid penalties. That 90-minute flight to New York just became three hours on the schedule but you’re not owed a dime if it arrives six hours after takeoff because it didn’t exceed the rule. This is not better for consumers, If an airline is only allowed to pad a schedule within the amount of flight time plus normal taxi periods, it might be enforceable.
One of the proposed changes requires airlines to refund passengers as opposed to remunerating with vouchers which sounds like a great idea. However, there’s a pair of problems with that. First, if you’re at the airport, your flight is delayed for whatever the limit is before compensation is due and the flight cancels. Great, you’ll have your money back at whatever price you paid, but you still have to get to your destination. If you bought a $300 roundtrip a few months ago, you’re not going to be able to now go and find another walk-up fare on a competing airline for $300 on no notice.
Secondly, you would only be due back the trip segment that is cancelled if it’s on the return leg. So let’s say that your roundtrip was comprised of a full flight on the outbound but an empty flight on the return and so instead of being refunded $150 (half of the roundtrip) you’re refunded $38 because the return was cheap but the outbound was expensive. Where are you going to find a one-way on no notice for $38?
Exceptions to Application
If it’s modeled after the European rules, weather doesn’t count. If you’re in Miami and there’s a hurricane, sorry, Charlie, the airline can’t be held responsible for that which is fair to the airlines and passengers. However, if you’re in Miami and it’s a clear day, but your aircraft is coming in from Jackson Hole, then Chicago and both have bad weather, your sunny skies won’t bring a grounded aircraft at O’Hare to Miami. The question of just how many downline delays that originate from weather will be in question.
Further, depending on how delay compensation works, if a plane leaving Jackson Hole, then stopping in Chicago, Charlotte, and Philadelphia before reaching Miami incurs a six-hour delay forcibly delaying every other flight, does the airline not have to compensate Miami passengers for their end of the day accumulated delay? Probably not.
There will be a way to game this and executives at the airlines will figure it out, be certain of this. I believe this will lead to more cancellations rather than fewer. It will be cheaper for the airline to just call a flight off than to try to get passengers to their destination paying for a delay plus the costs of operating the flight. That may not actually be in the best interest of passengers who may be better served by the airline trying to get them to their destination, even if egregiously late. For example, if a flight is into a city with limited activity, or it’s the last flight of the night, many passengers might opt for getting home three, four, maybe even six hours late rather than being stuck in a city or trying to find alternatives that do not exist or are too expensive to afford on short notice.
Some passenger protections in the US are long overdue, but I don’t think it will solve the flying experience for travelers. The EU 261/2014 rule is a strong example, though not flawless, and in some ways this rule will exceed it. That said, I think the vagueness of the rule as presented and some of the unanticipated consequences will be problematic. If congressional leadership and the DOT prunes and maintains this rule following its assumed passing, it could be great for travelers, but if adjustements aren’t made over time, its downfalls may lead to it going away.
What do you think? Will this rule solve air travel woes? Does it need adjustments, would you make other changes?