Hope Springs Eternal with New DOT Rulemaking

Following multiple debacles in the delivery of air travel services in the two years following the 2020 pandemic, the Department of Transportation announced, on May 8, 2023, that it would propose a new regulation to govern compensation of passengers whose flights are canceled or materially delayed. 

“When an airline causes a flight cancellation or delay, passengers should not foot the bill,” said U.S. Transportation Secretary Pete Buttigieg. “This rule would, for the first time in U.S. history, propose to require airlines to compensate passengers and cover expenses such as meals, hotels, and rebooking in cases where the airline has caused a cancellation or significant delay.”

The planned rulemaking is aimed at addressing the following:

• Compensation for passengers when there is a controllable airline cancellation or significant delay;
• A meal or meal voucher, overnight accommodations, ground transportation to and from the hotel, and rebooking for controllable delays or cancellations;
• Timely customer service during and after periods of widespread flight irregularities; and
• Definition of a controllable cancellation or delay.

Given the pace at which rulemakings at DOT typically move (in fairness, this is not just a DOT problem), there will be a considerable delay before any such rule becomes effective. Meanwhile, travel advisors are left to contend with the consequences of decisions made during the pandemic that continue to plague the air transportation system and the people that depend on it.

In April 2023, the U.S. Government Accountability Office (GAO) published a 50-page report entitled, AIRLINE PASSENGER PROTECTIONS—Observations on Flight Delays and Cancellations, and DOT’s Efforts to Address Them:

GAO was asked [by members of Congress] to determine key changes in the U.S. passenger airline industry resulting from the pandemic. This report examines (1) trends in and causes of flight disruptions before and after the pandemic; (2) challenges airlines faced managing and responding to flight disruptions; and (3) FAA and DOT actions to help address them.

Unfortunately, the most recent data available to GAO was from April 2022, so the report was a year outdated when it was issued. Nevertheless, it contains some interesting information that serves as a useful background for the challenges facing travel advisors today.

Flight cancellation rates in the last 6 months of 2021 outpaced 2018 and 2019 rates despite 14 percent fewer scheduled flights…. Increased cancellation rates continued through April 2022. GAO found that airline policies during the pandemic when they offered incentives for early retirement and voluntary unpaid leave, had so reduced their workforces that during the immediate post-pandemic recovery phase, “

Due to these workforce reductions, airlines faced challenges resuming operations when travel demand began to rapidly recover in the spring and summer of 2021.

GAO thus concluded that,

factors within the airlines’ control were the leading causes of flight cancellations and delays in the last 3 months of 2021, as well as in April 2022…. the total number of flight cancellations in the first 4 months of 2022 (81,593) exceeded the flights canceled during the same time period in 2018 (56,356) and 2019 (67,190).

There are indications that the situation has improved. DOT’s Bureau of Transportation Statistics reports that “in April 2023, the 10 marketing network carriers reported 596,676 scheduled domestic flights, 10,323 (1.7%) of which were canceled,” an improvement over “April 2022, when airlines scheduled 580,290 domestic flights, of which 13,397 (2.3%) were canceled.”

But that was still 10,323 canceled flights in one month or 344 canceled flights per day. During that same period, on-time performance was pretty dismal as well:

Highest Marketing Carrier On-Time Arrival Rates April 2023

1. Delta Air Lines Network – 81.8%
2. Alaska Airlines Network – 80.7%
3. American Airlines Network – 77.0% 

Lowest Marketing Carrier On-Time Arrival Rates April 2023

1. Hawaiian Airlines – 56.6%
2. Spirit Airlines – 60.7%
3. JetBlue Airways – 65.3%

Conditions may have deteriorated in more recent days; during the week leading to the July 4 weekend:

From Monday through Wednesday, at least 28,000 flights were delayed each day, and at least 1,200 were canceled, with Monday and Tuesday seeing about 2,200 cancellations each, according to the flight-tracking website FlightAware. The Federal Aviation Administration (FAA) forecasted 29 June would be the busiest day for air travel during the summer, with 52,564 scheduled flights. By 1 pm ET on Thursday, over 19,000 flights across the country had been delayed and 1,160 had been canceled, according to FlightAware. 

As severe storms and dangerous heat waves, continue to impact travel throughout the country, delays and cancellations will continue to plague the air travel system. There is no end in sight for disruptive conditions that are exacerbated by the continuing shortages of flight crews and other resources.

The implications for travel advisors are clear.

Given the publicity that these issues often receive, it may seem reasonable to think that travelers are fully aware of the issues facing the system. But it is a mistake to leave them to their own devices. Information is available, for example, on which flights are chronically delayed and this should be communicated to clients for whom such flights otherwise are attractive. Advisors should remain aware of severe weather events that could interfere with client travels and advise them in advance of backup options. This is particularly true for travelers with vulnerabilities that could become dangerous if, for example, an elderly couple is flying into an area with published severe-heat warnings or even bad air quality warnings such as occurred across wide swaths of the United States due to wildfires in Canada.   

Another very important issue that should be addressed with clients at the outset relates to flights to special events, including especially cruises. Flying to a port city on the day of the cruise is an invitation to disaster. While it adds costs to book a hotel the night before the ship departs, it’s a small price to pay for the added security if the flight is delayed or canceled. In this situation, particularly, it is important to create a written record with the client’s acknowledgment (an email is sufficient) that she was advised about the risk of trying to fly the day the cruise leaves.

The list of “things that can go wrong” on an airplane trip is long and, obviously, no advisor can be aware of everything on every trip. But these days the main influencers of travel disruptions – weather and chronically-delayed/canceled flights should always be top of mind when booking flights. This is another reason for being more familiar with the clients you serve, so you are aware of particular vulnerabilities that may call for special attention.

Someday, maybe, if DOT’s promised client compensation rules are adopted, the airlines themselves will join the effort to be sure clients are alerted to these risks. Hope springs …. Meanwhile, it’s mostly the advisor on whom clients will depend for this.