Congress to airlines: Police yourselves before we have to
May 2, 2017
(Note: This originally was posted on Politico Pro.)
Lawmakers in both parties lined up Tuesday to rail against airlines’ mistreatment of customers, from their raft of confusing fees to last month’s violent removal of a passenger from an overbooked United Airlines flight.
But Republicans made it clear that Congress isn’t eager to force changes on the industry, a powerful lobbying force that has racked up a series of wins in Washington in recent years. The industry is also pushing hard for lawmakers and the Trump administration to give them a major prize — an overhaul of the nation’s air traffic control system that would give them more control over how it operates.
Rather than push for new regulations, at least for now, House Transportation Chairman Bill Shuster (R-Pa.) said he expects the industry to clean up its act so Congress doesn’t have to step in.
“Seize this opportunity,” he admonished United CEO Oscar Munoz and executives from American, Southwest and Alaska airlines, during the first of two congressional hearings this week on airline customer service. “Because if you don’t, we’re going to come, and you’re not going to like it.”
Other GOP lawmakers continued the theme that they want airlines, not the government, to solve the rising anger among the flying public.
“I don’t believe government can solve your problems,” Rep. Rodney Davis (R-Ill.) said. “I don’t believe this committee ought to solve any customer service problems. Frankly that’s something that you should do for your customers.”
“I’m a conservative Republican,” said Rep. Brian Babin (R-Texas). “I don’t like regulation if I can get away with it. But something has got to be done in terms of customer service with some of you airlines.”
Meanwhile, Democrats took aim at increasing consolidation within the industry, bemoaning how four U.S. airlines control 85 percent of traffic in the skies.
“You can understand why we’re skeptical that the market is going to solve it,” said Democratic Rep. Elizabeth Esty of Connecticut.
And Oregon Rep. Peter DeFazio, the committee’s top Democrat, used the spectacle of a bloodied passenger being dragged off a United flight, and all the other airline customer woes highlighted in the days following, to question why anyone would want an aviation industry-dominated board in charge of air traffic control.
“I think the airline industry needs to focus on getting its own house in order, instead of extending its reach to control of our skies,” DeFazio said.
The rhetoric reflected the reality that airlines, which count members of Congress among its most frequent fliers, are unlikely to face significant legislative or regulatory blowback anytime soon, even after last month’s dragging of David Dao sparked viral outrage around the world. That may be especially true as the Republicans who control both Congress and the White House move fast to unravel a host of what they call job-killing, anti-business regulations imposed by the Obama administration.
In addition, the industry flexes plenty of muscle in Washington: United’s PAC alone doled out about $540,000 in campaign spending during the 2016 election cycle, according to filings with the FEC.
Airlines as a whole gave more than $6.3 million in federal contributions during the 2016 cycle, the Center for Responsive Politics reported. The industry gave $4.6 million of that chunk to congressional candidates in 2016, with Shuster raking in the most of any House member at $148,499.
Congress deregulated the airlines in 1978, eliminating the prior system in which the federal government set routes, flight frequencies and even airfares. It last took major action on airline passengers’ rights in 2012, with a bipartisan measure that imposed fines for airlines that trap customers on idling planes for more than three hours without certain kinds of relief or the opportunity to get off the flight.
And in recent years, airlines have notched big wins in both Democratic and Republican administrations. That includes a cascade of mergers that have helped about 85 percent of the market into four major carriers — a fact that some lawmakers observed is driving much of the seeming decline in customer service.
Just this March, the Department of Transportation quietly shelved a comment period on an early-stage Obama administration regulation, opposed by the industry, that would have required airlines and ticket agents to disclose luggage fees at all points in the fare search process. That effectively leaves the proposed regulation in limbo.
The industry has also won favor with Trump appointees who have indicated early support for the broad outlines of Shuster’s air traffic control overhaul. All the major U.S. carriers except Delta Air Lines support Shuster’s plan, which would remove air traffic control operations from the FAA and place them under a nonprofit corporation governed by a board dominated by the aviation industry.
Shuster didn’t succeed in getting his plan through Congress last year but is expected to reintroduce similar legislation in the coming weeks.
Domestic airlines made a net profit of $13.5 billion after taxes in 2016, DOT’s Bureau of Transportation Statistics reported Tuesday. That figure is down 45.6 percent from 2015. Airlines also collected $4.2 billion in bag fees and $2.9 billion from ticket change fees last year.
But they also face millions of often stressed-out, angry customers, whose gripes range from ever-more-cramped seats to the increasing array of fees and extra charges for amenities like checked luggage, changed flights and, on some airlines, access to the overhead bins. That’s on top of the incidents whose videos have spread on social media — including the dragging of Dao, and an altercation that broke out after an American Airlines flight attendant seized a stroller from a woman flying with her children.
Some Republicans at Tuesday’s hearing joined Democrats in complaining about the decline in competition.
“It’s an absolute joke that there’s competition within the airline industry,” said GOP Rep. Duncan Hunter of California, noting the shortage of nonstop flights he can take back to Washington. “If you just look at San Diego, it’s United Airlines. I have no other options.”
Republican Rep. Blake Farenthold of Texas quizzed airline executives about the proliferation of ancillary fees.
But again, Republican lawmakers said, big government intervention should not be the answer.
Rep. Rick Crawford (R-Ark.) said he doesn’t want to “jump into a competitive model and apply re-regulation, but that means that the industry has to do some self-regulation to demonstrate that you don’t need interference from Congress.”
If Congress eventually decides to step in, it could use its upcoming FAA reauthorization bill to address specific issues, perhaps through studies or directives to DOT. But lawmakers are unlikely to order a wholesale revamping of the way airlines treat its customers.
Based on questioning at Tuesday’s hearing, issues that could make the cut include the length and complex wording of most airlines’ contracts of carriage, to which passengers agree when buying a ticket, as well as the relative lack of “in-lining,” in which airlines that bump passengers rebook them on a competitor’s flight.
Munoz, the United CEO, agreed with lawmakers’ call for self-improvement while apologizing again for his company’s treatment of Dao.
“The last three weeks I have spent literally every single day thinking about how we got to this point,” the chief executive said.
Munoz listed a number of policy changes the airline has made in response to the incident and vowed to provide more regular training to employees. “Our curriculum for customer service training and dealing with de-escalation issues is something we have to strengthen,” he said.
Brianna Gurciullo contributed to this report.
