Senate Democrats introduced a couple of bills that could drastically change how much it costs to take a flight in the U.S.
Something good may actually come from the tens thousands of flight cancellations during the holiday season if two Senate bills successfully make their way through Congress.
Senate Democrats Richard Blumenthal (CT) and Edward Markey (MA) introduced separate bills this week that are designed to increase protections for passengers and eliminate some of the fees that airlines charge.
Requests for comment from United Airlines (UAL) – Get Free Report and Jetblue (JBLU) – Get Free Report were not immediately returned, while American Airlines (AAL) – Get Free Report and Delta (DAL) – Get Free Report referred us to Airlines for America.
“It is in the interest of all U.S. airlines to provide a positive flight experience for all passengers,” Marli Collier, a spokesperson for the trade group said while noting that the industry issued $32.2 billion in customer refunds between January 2020 and December 2022, including $11.2 billion in 2022 alone.
“There is no evidence of a market failure or unfair or deceptive practices in this area.”
But Senators say the current structure isn’t enough. Here is their proposal.
Consumer Protections
The Airline Passengers Bill of Rights would allow air carriers to offer compensation to a passenger in order to incentivize that passenger to relinquish his seat, but would prevent that carrier from imposing a cap on that compensation.
If there is a flight delay or cancellation for any reason because of the air carrier — like staffing issues, routine maintenance, malfunctioning IT systems, passenger service issues, baggage service issues, etc — passengers who arrive at their destination delayed by more than 1 hour and less than four hours will receive an automatic refund.
The airline will also have to find a seat for those passengers on another flight operated by the same carrier, or on a flight operated by another carrier, or on an alternative means of transportation, at no additional cost to the passenger.
If the arrival time is delayed by more than four hours, the airline will be required to do all of the above, and provide compensation of $1,350 in cash as well as meal vouchers.
If the flight departure is delayed until the next day, the airline must provide the passenger with an amount equal to the cost of hotel lodging in addition to the cash and meal voucher provisions.
Airline Fees
The bill also looks at airline fees “that are unreasonable or disproportional to the costs incurred by the air carrier.”
Those fees include change and cancellation fees, any fee related to checked or carry-on baggage, and seat assignment fees.
From the airlines’ point of view, the bill carves out some provisions for the ability of an air carrier to “anticipate the expected average number of cancellations an changes, and the ability of the airline to fill a seat made available by a change or cancellation, among other considerations.
For the baggage fees, the bill has provisions for the costs of processing checked baggage electronically, as well as the labor costs related to baggage.
The bill also seeks to compel airlines to put all of this information in a “user-friendly, accessible form.”
Meanwhile Airlines for America says that the bill would “drastically decrease competition, leading to a subsequent increase in airfare prices and potential cut in services to small and rural communities.”
Airlines Facing Backlash
While the Senate bill has a long process before it is voted on and made law, airlines have brought this type of scrutiny on themselves in recent months.
The busy summer and holiday travel seasons were both marred by massive flight delays and systemic failures that forced tens of thousands of passengers into uncomfortable and sometimes inhumane situations.
The last straw seemed to be Southwest Airlines (LUV) – Get Free Report and its hiccup over the holidays that resulted in more than 16,700 cancelled flights over a 10-day period.
Those cancellations had an after-tax net impact of $620 million, leading the company to report a fourth quarter net loss of $226 million.
It incurred an estimated $410 million revenue penalty due to the operational disruptions.
When asked for a comment about the proposed Senate legislation, Southwest Airlines said, “We empower Southwest Employees to lean in and take care of our customers guided by a simple philosophy of doing the right thing, which has served us well throughout our long and proud 51-year history of offering world-class customer service.”
