Does The New Airline Travelers “Bill of Rights” Go Too Far?
On August 23 the majority of the new rules proposed in what is being called the “Travelers Bill of Rights” took effect. This is yet another set of rules and regulations aimed at the already heavily regulated airline industry, which leaves one to wonder how many more regulations can possibly be imposed on the airlines. When it comes to safety it is an obvious necessity to have certain rules in place to protect passengers but if the government continues to impose such hefty regulations they may price the airlines out of business. There is no doubt that these additional rules and regulations will have an impact on the price of airline tickets. The question that is yet to be answered is how much of an impact will this have. This new set of regulations does provide a comprehensive set of consumer protections but at what cost? It has been proven throughout history that whenever an industry is overly regulated that it can result in devastating consequences for those businesses involved.
With the newly imposed rules, the maximum amount of compensation offered to travelers who are involuntarily bumped from a flight and experience a 1-2 hour delay is $650. The amount of actual compensation is equal to two times the one way ticket value and capped at $650, which is up from the previous cap of $400. For those who experience longer delays in the same situation, greater than 2 hours, the maximum amount of compensation is $1,300. This amount is calculated as four times the one way ticket value, with a maximum of $1,300, which was previously capped at $800. So what does all of this mean for the average traveler? As any business would do, the airlines attempt to recoup any fees or expenses that they feel will be forthcoming. This means that the fees that they anticipate paying out to customers will be priced back into future ticket sales. While this is just one small part of the ticket price equation, it does play a role. So consumers will likely end up paying more for their tickets, but getting more if they get bumped from a flight. That doesn’t seem to be a great step forward for passengers, as is being claimed by the Department of Transportation.
While there are some bright spots in this “Bill of Rights” such as making it mandatory for airlines to refund any fees for checking baggage that was lost, in addition to compensating passengers for the actual value of baggage. It only makes sense that if you are charged for a service that is not performed, you should get your money back. Since this is an additional fee on top of ticket prices this should not have any type of impact on ticket prices.
Another piece of these new regulations is to limit the amount of time an aircraft can spend on the tarmac to 3 hours for domestic flights and 4 hours for international flights. While the domestic rule had already been in place in larger airports, it is now in effect at all airports. The international rule of 4 hours just took effect with the other regulations. This has already had a substantial impact in reducing the amount of delayed flights but this comes at a cost to passengers. Now the airlines are so afraid of the potential penalties that they are simply canceling any flights that are going to have passengers waiting on the plane. This is one of those double edged sword rules that has had some positive impact but also some negatives. It comes down to whether you would prefer to wait it out on the plane and make it to your destination a few hours late or have your flight canceled and leave the next day.
No matter how you feel about these new rules it is indisputable that there will be economic consequences attached. There comes a point where businesses need to be allowed some control over how they operate and the airlines are losing more control every year. If consumers are unhappy with the way an airline operates they will choose a different one, adding more government regulations simply adds more government jobs and isn’t government already big enough?
