Selling Travel to Families May Be About to Get More Complicated

On July 31, 2024, the U.S. Department of Transportation issued the text of a new proposed regulation. This action was required by Section 516 of the FAA Reauthorization Act of 2024 (2024 FAA Reauthorization Act, Reauthorization Act. The basic outlines of the proposal were covered in a TMR article on August 1, 2024: U.S. DOT Proposes Ban on Airline Fees for Family Seating.

I will not repeat most of that information but I want to address some aspects of the proposal that DOT appears to have neglected. Most notably, the text ignores the role of travel advisors in executing the new rules, assuming they are adopted and survive anticipated legal challenges.

Travel purchasing is already very complex due to the proliferation of fare types, the introduction of NDC, and the large array of ancillary fees the airlines now charge for various elements of the air travel purchase that formerly were incorporated in the base price. Over time, the DOT has moved slowly in the direction of requiring unitary pricing as opposed to what is called “drip pricing” in which the final total price for the purchase is revealed in different stages of the purchase process. Drip pricing makes price comparisons very difficult and has been roundly condemned by consumer groups, the Federal Trade Commission, and, to some extent by DOT itself.

The problem is that the government is not able to regulate directly price-setting in the airline industry, a process that was formally abandoned by the Airline Deregulation Act in 1978. The removal of price controls led ultimately to ancillary fees as the airlines saw and took advantage of opportunities to get additional revenue from passengers. The proliferation of ancillary fees shows no signs of remission.

After several years of study and the passage of the FAA Reauthorization Act of 2024, the government has now decided that the ancillary fee process has exceeded the bounds of reasonableness in at least one respect: charges for families with minor children who want or need to be seated together.

However desirable the goal may be, the realities of creating a set of rules around this issue hs proved to be enormously complicated. And in the process, the DOT has seemingly ignored the involvement of travel advisors in the process of providing consumers with the rules’ convoluted elements and applications.

What the rule says about travel advisors

The NPRM uses the terms “ticket agent” (the statutory term) and “travel agent” just six times, in reciting the authority of DOT to impose civil penalties for violations of its regulations and in addressing some of the issues that inevitably will arise in implementation of the rules. Here is some of the text (italics are mind for emphasis):

“When there is available family seating at the time of booking, assigned seating carriers would be required to make every reasonable effort to assign adjacent seats to a young child and accompanying adult at the time of booking the reservation, but no later than 48 hours after the tickets are purchased, at no additional cost, unless an exception applies. The proposed rule provides carriers up to 48 hours to assign family seating if the carrier is unable to assign the seats during the booking process (e.g., the carrier does not have an automated reservation system to assign seats, ticket was purchased through a ticket agent).” 

The other reference is to the request for input about an expansion of the rules to prohibit unbundling of charges for other “basic services,” defined as a “service that is essential for a carrier to provide adequate air transportation to a passenger as determined by the Department after notice and comment.” Statements of the price for a seat must include all “basic services,” so that additional charges for them may not be separately assessed except as provided in the details of the regulations defining them. 

In simple English, a “basic service” will be whatever DOT says is “necessary” to provide “adequate air transportation” after a further rulemaking process is undertaken. No separate charge may be imposed for any “basic service” which must be included in the advertised price for the seat. The related principle is that DOT:

“is proposing to define the term “ancillary service fee” as a fee charged for any optional service that a carrier provides beyond passenger air transportation.  Such fees may include, but are not limited to, charges for checked or carry-on baggage, canceling or changing a reservation, advance seat selection, in-flight beverages, snacks and meals, lounge access, bedding or other amenities, or seat upgrades so long as the fees are not for basic services.”

The NPRM thus seeks comments on the full range of questions related to the charges for ancillary services:

“The Department seeks comment on its proposed definition of basic service, and whether seating a young child adjacent to an accompanying adult is a basic service. What, if any, other services beyond adjacent family seating should be considered a basic service? Should services related to the consumers’ physical well-being such as access to the lavatory and the availability of drinking water upon request be considered basic services?  Should services necessary for air transportation such as booking or paying for a ticket, checking in online, printing a boarding pass for those unable to do so themselves, or receiving customer service be considered basic services?“

The issues apparently under consideration include:

“comment on whether a young child should ever be seated separately from an accompanying adult even if a family does not wish to sit in the adjacent seats assigned by the airline.”

For a full appreciation of the massive complexity of the proposed rules, see this chart included in the NPRM (again, italics are mine) on the DOT website.

What the rule doesn’t say

The proposed rule does not address how the airlines will provide travel advisors with relevant and timely information related to the rules and the many implementation issues that the terms of the rules imply. However, the proposed rule defines “booking party” so as to exclude travel advisors working on behalf of their family clients: “Booking Party means the person who booked the reservation for air travel. The booking party may or may not also be an accompanying adult.” Airlines may choose to involve the advisor in these notifications and decisions but under the rules, as proposed are free to bypass the advisor.

The disclosure proposal does not refer to providing any information to travel advisors:

“… the Department is proposing to require carriers to disclose that they will seat a young child adjacent to an accompanying adult at no additional cost with limited exceptions and disclose the exceptions that may impact the consumer’s ability to secure adjacent seats, if the proposal to ban family seating fees is adopted in final. The Department is proposing to require this disclosure on carrier’s online platforms and when a customer calls the carrier’s reservation center to inquire about a fare or seating or to book a ticket.”

This is an unfortunate oversight and seems likely to lead to unnecessary complications and confusion for consumers and advisors alike.

The NPRM has not been published in the Federal Register. When it is, comments will be due 60 days thereafter.

The proposed rule does not address how the airlines will provide travel advisors with relevant and timely information related to the rules and the many implementation issues that the terms of the rules imply. However, the proposed rule defines “booking party” so as to exclude travel advisors working on behalf of their family clients: “Booking Party means the person who booked the reservation for air travel. The booking party may or may not also be an accompanying adult.” Airlines may choose to involve the advisor in these notifications and decisions but under the rules as proposed are free to bypass the advisor.

The disclosure proposal makes no reference to providing any information to travel advisors:

… the Department is proposing to require carriers to disclose that they will seat a young child adjacent to an accompanying adult at no additional cost with limited exceptions and disclose the exceptions that may impact the consumer’s ability to secure adjacent seats, if the proposal to ban family seating fees is adopted in final. The Department is proposing to require this disclosure on carrier’s online platforms and when a customer calls the carrier’s reservation center to inquire about a fare or seating or to book a ticket

This is an unfortunate oversight and seems likely to lead to unnecessary complications and confusion for consumers and advisors alike.

The NPRM has not been published in the Federal Register. When it is, comments will be due 60 days thereafter.