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Airlines brace for new rules

Both the Obama administration and Congress are focusing their regulatory efforts on the chronically troubled industry more intently than ever before. So much so that US Airways CEO Doug Parker grumbled publicly earlier this year: “The biggest threat to our viability is government intervention.” David Castelveter, spokesman for the trade group Air Transport Association, complains half jokingly, “We’re the most regulated deregulated industry in the country.”

In comments filed Thursday in response to a sweeping set of new airline consumer protection rules proposed by Transportation Secretary Ray LaHood, the ATA said its member carriers are generally supportive of LaHood’s proposed new rules, with some exceptions.

“The administration and Congress have picked a group for whom there is absolutely no public sympathy,” says industry analyst and consultant Darryl Jenkins of the website The Airline Zone. “No matter what you do, if you’re the DOT or Congress, you’re going to come out looking like a winner ’cause you just whacked someone nobody likes.

“But my real concern is, what is good public policy? I’m afraid that’s not really being addressed,” Jenkins says.

In 2010 the increased regulatory focus on airlines has led to:

The Department of Transportation instituting a new rule earlier this year limiting to three hours the length of time passengers can be kept on the tarmac.

LaHood proposing a raft of new rules that, among other things, would force carriers to disclose all possible fees for services beyond the basic seat on a plane before tickets are bought. Other possible rule changes: restriction on advertising airfares and a ban on peanuts as an in flight snack. The public comment period on those proposed rules closed Thursday.

The Federal Aviation Administration imposing huge fines this year on carriers for maintenance and safety rule lapses that did not appear to endanger travelers. That reversed the agency’s previous cooperative approach to safety oversight developed during the Bush and Clinton administrations.

Sen. Jim Webb, D Va., proposing a bill to make the $7.9 billion in fees collected by airlines last year for services not covered by the ticket price subject to the same 7.5% excise tax as fares.

The National Mediation Board changing a 70 year old rule that governs union organizing in the air and rail industries. The change
cheap ray bans makes it easier for unions to win representation elections at carriers such as Delta, where most employees long have voted to keep unions out.

The DOT proposing new rules expanding both the number of hours pilots can fly in a day and the number of hours of rest they must get between duty periods, upsetting both airline managers and pilots unions. “I’m not saying that that’s a good thing or a bad thing, but it’s in response to political pressure.”

And the Regional Airline Association, representing regional carriers, said Thursday in its comments on the proposed new rules that the DOT “should resist imposing industrywide rules in reaction to aberrational behavior or rare incidents caused by weather and other circumstances beyond the control of carriers.”

But Transportation Department spokesman Bill Mosley defends the agency’s more activist approach, noting that “when Congress deregulated the airline industry, it purposely maintained important provisions to ensure that airlines would provide safe and adequate service and that consumers would not be subjected to unfair or deceptive practices.

“Airline passengers have rights. And the rules we have adopted and proposed are designed to ensure that airlines live up to their obligation to treat people fairly,” Mosley says.

Airlines “are asking travelers to put on a blindfold and hand over their wallets every time they buy a ticket,” says Charles Leocha, director of the Consumer Travel Alliance. and European consumer groups. On Thursday, the campaign delivered a petition bearing more
replica ray bans than 50,000 travelers’ signatures in support of LaHood’s fees disclosure proposal to DOT officials in Washington.

In a recent survey co sponsored by the alliance, two thirds of travelers said they were surprised at the airport by extra fees that were not included in the ticket price.

Former Transportation secretary James Burnley doesn’t buy that. Bush and is now a policy consultant to airlines and other transportation companies.

“If (consumers) can figure out how to buy a ticket and get to the airport, and how to get through security, they ought to be able to figure out that there are going to be fees for services these days,” Burnley says.

But Kevin Mitchell, head of the Business Travel Coalition, which represents corporate travel managers, says it
fake ray bans is critical that there be a rule requiring full disclosure of fees by whatever airline, website or agent is selling the ticket.

“The first airline that does will be at a huge price disadvantage. Their fares will look 15% or 20% or 30% more expensive than their competitors’,” Mitchell says.

Airlines began unbundling so called ancillary services from their basic fare prices two years ago, during the worst financial downturn in industry history. They knew they had to keep their posted fares low to compete for the majority of customers who have proved by their buying behavior that they’ll choose a different carrier to save as little as $5 on a round trip fare.

Yet they also had to find ways to increase revenues to return to profitability. Charging separate fees for checking bags or for providing a number of services that used to be covered by the ticket price allowed them, in effect, to introduce a de facto fare
cheap ray bans increase without actually raising their posted prices to non competitive levels.

In fact, most carriers already disclose their fees on their own websites, where consumers can’t easily compare them with prices offered by competing airlines. But they don’t provide that same information to the Global Distribution System used by both conventional and online travel agencies to help their customers comparison shop.

A federal rule requiring all airlines to standardize their information might solve that problem. But some carriers object to being required by the government to present their information in a prescribed format to third party vendors, such as the Sabre and Travelport Global Distribution Systems used by travel agents.Articles Connexes´╝Ü

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