Passenger rights to be Trumped by new administration

by Clive Dorman - consumer editor
61
December 14, 2016

A range of new or planned US government air travel regulations is expected to be axed as the new Trump administration takes office.

Barack Obama’s Democratic White House had set out to force the airline industry to be more transparent in the second half of 2016 by using so-called executive orders to ram through regulatory changes that avoided scrutiny by the hostile Republican-controlled Congress and Senate.

Likely to be dumped are new regulations promised or enacted to  stop airlines hiding their marketing arrangements with their commercial partners and to extend the provision of on-time performance statistics to include fringe airlines with a small market presence – both “reforms” opposed by the airline industry.

Regulations enacted in 2011 forcing airlines to pay up to $US1300 compensation per passenger for being bumped off a flight may also be subject to review.

The Trump transition team has hired a long-time Washington insider, 63-year-old Elaine Chao, to head the bureaucracy that regulates air travel, the Department of Transportation (DOT).

Chao, the wife of politician Mitch McConnell, the Republican majority leader in the US Senate, was the secretary of the Labor Department in the George W. Bush administration between 2001 and 2009. She was also deputy transportation secretary in the George H.W. Bush administration in 1991-92.

Like Trump, who ran the Trump Shuttle airline linking Boston, New York and Washington between 1989 and 1992 before he sold it to the former US Airways (now part of American Airlines), Chao has airline experience as a member of the board at Northwest Airlines before it merged with Delta.

According to Thomas McGarity, a University of Texas law professor who wrote a book dealing with Chao’s stewardship of the Labor Department, she is "a strong advocate of letting the markets function as they will, not intervening into private sector arrangements".

However, she is also expected to be a key player in President-elect Trump’s pledge to spend $US1 trillion renewing public infrastructure, especially airports. (Unlike other countries, all major American airports are run by local government or public authorities.)

“Our airports are like from a third-world country,” Trump said during the election campaign. “You land at (New York) Laguardia, you land at (New York) Kennedy, LAX, and you come in from Dubai, China, you see these incredible airports (over there) … we've become a third-world country.”

Trump also supports modernisation through privatisation of the air traffic control (ATC) system — a relic of the 1940s — as has been done in the United Kingdom.

ATC is a major reason for chronic delays – especially around New York’s three major airports, where up to an hour has to be added to flight times to allow for airways congestion.
 
Outgoing Transportation secretary Anthony Foxx had said the Obama administration wanted “to make sure we get as much transparency as possible” in pushing through changes in the way airlines were allowed to marketing their products with third-party suppliers in online computer reservation systems.

Fares rules crackdown .

But the move succeeded only in creating hostility in the airline industry, which accused the administration of hijacking legitimate, competitive marketing.

By outlawing differentiation between airlines in providing products and incentives to win business, the government was encouraging mediocrity and destroying competition, the airlines said.

Though the early stages of Chao’s tenure are likely to be occupied delivering new infrastructure for airports and the reform of ATC, it’s likely that airline penalties awarding passengers up to four times the value of the ticket price if they’re bumped off a flight may also face review.

Like the European Union penalties for airline delays, which can award passengers multiples of the fare paid, the new US bump rule’s unforeseen consequence is that it gives passengers an incentive to be bumped or to “blackmail” airlines to provide benefits to avoid the government-mandated fines.

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In the meantime, however, the focus will be on how soon Chao can start her job. Opposition minority Democrats in the US Senate are reportedly planned to delay approval for many of President-elect Trump’s cabinet appointments as a political tactic to frustrate the momentum he had hoped to bring to the job after his inauguration on January 20.