ASTA: New DOT Rules a Mixed Bag

ASTA will redouble its efforts to have the U.S. Department of Transportation (DOT) formulate a rule requiring airlines to enable travel agents to sell ancillary services at the same time they book flights.

In a press conference on proposed new airline passenger protection rules, ASTA executive Paul Ruden said ASTA is pleased with one DOT proposal to require airlines to disclose fees for basic ancillary services – including first and second checked bags and advance seat assignments – at all points of sale, including on GDSs. (An alternate proposal would exclude GDSs.)

The rule, however, doesn’t address agents’ ability to sell ancillaries, said Ruden, ASTA’s senior vice president of legal and industry affairs. ASTA will push for “concurrent transactibility; equipping agents with the ability to sell ancillaries at the same time as selling airfare.”

“We think withholding this ability is plainly contrary to the public interest,” he said.

Ruden said that while the DOT did not propose making such transactions possible, it asked for comments on the issue, which leaves the door open to the possibility.

Significant development
“Overall this is a very big moment in our industry’s history,” Ruden said of the latest DOT rules. “This has embraced new ground; its important for agents that consumers be treated right, not just by them, but by the airlines.”

Still, ASTA has objections to some of the proposed rules.

One is a proposal to require “large” travel agents, defined by the DOT as those with annual revenues of $100 million or more, to adopt consumer service standards.

Customer service standards would include responding  promptly to customer complaints, giving timely notice of itinerary changes, and holding a reservation at the quoted fare for 24 hours,  without payment, or allowing cancellations without penalty, if the reservation is made a week or more before a flight’s departure.

‘Non-existent’ problem
The rule addresses “a non-existent problem,” said Ruden.

Airlines have been subject to consumer service requirements adopted under earlier DOT consumer protection rules, he noted.

“But while there’s a certain symmetry here, the fact is the requirements for the airlines were based on market behavior problems that consumers experienced,” Ruden said.

“To our knowledge there is not a scintilla of evidence that this exists for agents who operate in an extremely competitive environment.”

Large vs. small
Ruden said he also has no idea why the DOT made a distinction between “large” and “small” agencies under this rule.

“We’re talking about consumer protection plans,” he added. “I don’t understand that at all, because the agencies that would be subjected to this are among the [industry’s] most successful; they don’t need a rule to take of their customers.”

Bias rules
Another proposed rule would require airlines and travel agents to disclose any bias in their Internet displays of fare and schedule information.

In its discussion of display bias, the DOT raises the question of whether airline ticket sellers, including travel agents, should be required to disclose incentive payments they receive in conjunction with air ticket sales and asks for comment on the issue.

“There are a lot of problems and unintended consequences in this,” Ruden said. “We don’t support the biasing of displays and we think if it happens it should be disclosed, but this is a separate issue from disclosing incentives.”

A long process
Comments on the proposed rules are due in 90 days. It’s likely the adoption of a final version of the DOT’s new proposed rules won’t take place until well into 2015, said Ruden.

There may then be one or more additional rounds of comments, Ruden said. “It may even be that these will create an offspring of additional rulemaking.”

And all of this before the actual implementation of the rules takes place.