New Airline Regulations
The Airline Deregulation Act of 1978 was intended to remove government control over routes, fares, and market entry of new airlines. The act was succcessful as time went on, allowing competition among the airlines to keep prices low and innovation high. However, in recent years the US airline industry has had to deal with more and more regulations, leading some to wonder if we are heading back to a time when airlines were "regulated" by the government.
In late 2009, the Obama administration passed regulation that stipulated how long the airlines could keep passengers on board an airplane (three hours). Now, the same administration is set to impose additional regulations, effective Jan. 26, 2012. The following is an update on how these new regulations affect travelers.
We've all been on airline websites or online travel agencies (i.e. expedia.com, orbitz.com, travelocity.com) and experienced first-hand how difficult it is to understand the actual cost of a ticket. That's all changing. Now, airlines are required to display all quotes as a total price, including all mandatory taxes and fees. The new regulation does allow the breakout of the base fare and the other components to the total price, but does stipulate that those amounts "may not be displayed prominently" and "may not be presented in the same or larger size as the total price." Another change is more semantic than anything - websites are now required to label flight options as "each way" instead of "one way" if a round trip is required.
A bigger change for the travelers is a new requirement that airlines must allow travelers to hold a reservation for 24 hours without payment. In addition, airlines must grant full refunds for cancellations made within 24 hours of initial payment. This will certainly be a great thing for travelers as they shop around for an itinerary or are just trying to decide if they can make a trip work for them. One possible side effect from this is that it might bring back truth to the recommendation to book flights early in the morning. Only time will tell how airlines decide to implement this policy.
There are also a couple of changes to pricing. Airlines will now be prohibited from automatically charging for optional services based on an "opt out" basis. Increases in airfares or any component of an air-inclusive package "post-purchase" are now prohibited. Finally, price increases between the passenger's first deposit and final payment cannot be assessed unless the passengers accepted such terms in writing at the time of booking.
Requirements reqarding notifications are also changing. Airlines and OTA sites will be required to inform consumers selecting a particular itinerary and fare that baggage fees may apply and also indicate where the details can be found. All confirmation emails will be required to explain the baggage allowances and fees for all bags, including carry-on bags. Airlines will also be required to publish information about delays, cancellations, or any changes in the status of a flight within 30 minutes of becoming aware of the change. The information will be required to be made available at the boarding gate, on the web, and via call centers.
For most consumers, these changes sound like a positive change. There might be one problem though. The airlines have appealed almost all of these new regulations. So, in typical airline fashion, the implementation of these new regulations may be...delayed.
