A technology issue caused a meltdown of Southwest Airlines operations over the holidays. (Photo by Tim Boyle)
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With the Southwest Airlines holiday meltdown still fresh in the minds of travelers, a handful of U.S. senators are trying again to secure more protections from air passengers.
Senators Richard Blumenthal and Edward Markey on Tuesday joined with four colleagues in reintroducing previously proposed legislation, called the “Passengers’ Bill of Rights” and the “FAIR Fees Act.” Both bills were introduced in late 2021 during the last Congress and failed to move ahead.
“The Southwest Airlines debacle is just the latest example of why we urgently need stronger passenger protections, as air travel has become more stressful, unpredictable, and uncomfortable for fliers,” said Senator Blumenthal. “This legislation will establish clear, enforceable rules for airlines to follow, putting consumers first and restoring sanity to the skies.”
Compared to airline passengers in Europe and Canada, U.S. travelers have fewer protections, in part because the airline industry has been historically successful in defeating proposed legislation.
“The airlines are going to have armies of lobbyists and lawyers to fight us,” Senator Blumenthal told reporters yesterday. “But I think we have a very powerful consumer movement here that can carry the day.”
Airlines for America, the trade group representing major airlines, came out swinging. “The proposed policies in this bill – instituting government-controlled pricing, establishing a private right of action and dictating private sector contracts – would drastically decrease competition, leading to a subsequent increase in airfare prices and potential cut in services to small and rural communities,” the group said in an email to Forbes.
“There is no evidence of a market failure or unfair or deceptive practices in this area, to the contrary,” said Airlines for America. “In addition to other forms of compensation, the 11 largest U.S. passenger airlines issued $32.2 billion in customer refunds, nearly $900 million per month, between January 2020 and December 2022. This includes $11.2 billion in 2022 alone, exceeding 2019 by almost 50 percent.”
“Despite receiving $54 billion from Congress during the pandemic to stay afloat, airlines were painfully unprepared for the millions of passengers returning to the skies,” Senator Markey told reporters. “No wonder only 27% of Americans have a positive view of the airline industry. That’s worse approval rating than Elon Musk or Kanye West.”
The senator did not mention that Congress has an approval rating of just 21%, according to the most recent Gallup poll.
Last year, the government leaned hard on airlines to be more transparent about rules regarding consumer rights. The Department of Transportation launched an Aviation Consumer Protection dashboard, which shows side-by-side comparisons of what each airline offers in the event of a controllable delay or cancellation.
Among the provisions in Blumenthal’s bill are the reinstatement of the right of passengers to sue airlines in federal and state court for unfair and deceptive practices and the establishment of a $1,350 minimum in compensation for a passenger involuntarily denied boarding as the result of an oversold flight.
Blumenthal’s bill would also eliminate the cap on fines that DOT charges airlines for violating consumer protection laws and “prevents airlines from negotiating low, slap-on-the wrist fines for egregious conduct.”
Last year, the Department of Transportation’s Office of Aviation Consumer Protection announced that it had levied $8.1 million in civil penalties, the largest amount ever issued against airlines in a single year.
But, notably, only one of the penalized carriers was based in the United States. Denver-based ultra-low-cost-carrier Frontier Airlines, which owed $222 million to customers, received a $2.2 million civil fine from the DOT. Frontier had made $31 million in profits the during the previous quarter alone.
Transportation Secretary Pete Buttigieg said at the time that when a flight gets canceled, passengers should be refunded promptly. “When that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back,” he said. “You shouldn’t also have to haggle or wait months to get your refund.”
For airlines, 2022 was an often bumpy post-Covid return to profitability, driven by the combination of robust travel demand and higher airfares. Most major airlines reported higher revenue despite diminished capacity, indicating that passengers have been more than willing to pay inflated fares.
Even Southwest Airlines, where an epic failure of its outdated flight scheduling software led to a holiday meltdown with nearly 17,000 canceled flights in late December, reported a profit of $539 million for the year.
Many industry watchers are skeptical that these latest pieces of legislation will take off. On LinkedIn, a top editor at The Points Guy called the legislation “a long shot,” to which the founder of The Airline Observer newsletter commented, “Would you like to make a good-natured bet on whether we see this in our lifetimes?”
The bill’s future will depend on obtaining bipartisan support, which has been elusive. “There has to be an overhaul of the relationship between the airlines and consumers,” Senator Blumenthal said. “I think our Republican colleagues ought to join us and saying no more business as usual. No more disruptions as a routine fact of life and flying.”
