Proposed DOT Rule Would Require Agents to Disclose Airline Pay

Travel sellers, travel management firms and tour operators would be required to disclose airline pay under proposed new passenger protection rules that the Transportation Department will issue by year’s end.

The DOT is “considering a requirement that travel agents disclose the carriers whose tickets they sell or do not sell and information on any incentive payments they receive for selling air transportation,” spokesman Bill Mosely told Travel Market Report.

But ASTA chief legal counsel Paul Ruden said he is optimistic that the pay disclosure requirement will not become law. The DOT has no evidence that travel agents, unlike airlines, are anti-consumer, said Ruden, senior vice president of industry and legal affairs.

Service standards for agents
The DOT’s rulemaking, its third major aviation consumer protection rulemaking under the Obama Administration, was submitted to the Office of the Transportation Secretary on July 17.

The new rules would also make travel agents and tour operators “adopt minimum customer service standards when they sell air transportation,” Mosely said in an email.

Those “minimum standards,” stated Mosely, are contained in the DOT’s second airline consumer rule, which went into effect for airlines in January.

“Some of these standards would apply to travel agents, such as providing prompt refunds,” Mosely said. “Others are specific to air carriers and would not apply to travel agents, such as delivering bags on time and refunding baggage fees if bags are lost.”

Key aspects of the DOT’s second airline consumer rule were upheld in the U.S. Court of Appeals this week, in a ruling against Spirit and Southwest airlines. The carriers had challenged the requirement that the most prominent figure displayed on print advertisements and websites be the total price, inclusive of taxes, calling it “arbitrary and capricious and a violation of the First Amendment.”

That rule also applies to travel agencies, and TripAdvisor recently became the first company to be fined under the rule.

ASTA: ‘Inappropriate’ action
ASTA is working to ensure that the DOT does not adopt the regulations affecting travel agents.

“We have met with them and written them about this, because we do not believe [these issues] belong in this rulemaking,” said Ruden, who noted that airline ancillary fees will be the major focus of the third aviation consumer protection rule.

Regarding the travel agency provisions, he said, “No evidence warrants imposing consumer service standards on travel agents, and we think this is inappropriate for DOT to do this.”

While the airlines have a history of anti-consumer behavior and high levels of consumer complaints, travel sellers do not, said Ruden.

“There is no justification to impose these additional costs on travel agents. There are no consumer complaints about agents not doing what they are supposed to do for their customers.

“Agents are so heavily dependent on repeat business, they have to perform,” Ruden added.

Balancing act?
Asked why the DOT is considering customer service standards and pay disclosure rules for travel sellers and tour operators, Ruden speculated that there might be a balancing act going on within the DOT’s bureaucracy.

“If we did this to the airlines, then we have to do this to travel agents” might be the thought process, he said.

More details on the rulemaking are available on the DOT’s website. (See Enhancing Airline Passenger Protections III)

Related stories:
“DOT Expected to Enforce New Air Rules Aggressively,” Jan. 26, 2012.

“An Agent-Friendly Guide to New DOT Disclosure Rules,” Jan. 26, 2012.